RailTel IPO subscribed 7.6 times on last day; price band fixed at Rs 93-94

The initial public offering (IPO) of state-owned RailTel Corporation of India was subscribed 7.6 times on its third and last day of bidding. The Rs 820-crore public issue at a price band of Rs 93-94 per share was subscribed 12.09 times by retail investors, 3.18 times in QIB category and 3.29 times in the NII category.

RailTel Corporation of India's Rs 819.24-crore IPO, the seventh issue this year, is a complete offer for sale of 8,71,53,369 equity shares by the government. The minimum market lot size for the IPO is 155 shares, where an individual investor can apply for up to 13 lots (2015 shares or Rs 189,410). The public issue was fully subscribed on the very first day of the bidding.

As per the company's DRHP, the company will not receive any proceeds from the offer and the net proceeds are to be used for carrying out disinvestment plan and to achieve the benefits of equity share listing on the stock exchanges. The President of India, acting through the Ministry of Railways, is the promoter of the company.

The Ministry of Railways will plan to sell 27% stake through the issue. Market experts have suggested Rs 30-40 listing gains for short-term perspective in RailTel Corporation.

KFintech Private Limited is the registrar for the IPO, while ICICI Securities, IDBI Capital, SBI Capital Markets are merchant bankers to the issue. The shares are proposed to be listed on BSE, NSE on 26th February 2021.

Incorporated in September 2000, the Mini Ratna (Category-1) Railtel is an Information and Communication Technology (ICT) infrastructure provider company, that covers optic fibre network over 55,000 km and 5,677 railway stations as of 30 June 2020. The public sector business unit, wholly owned by the Government of India (GOI) and administrated by the Ministry of Railways, is one of the largest neutral telecom infrastructure providers in India with PAN India optic fibre network.

Reliance Securities, SMC Global, IIFL Wealth, TopShareBrokers.com, BP Wealth, Choice Equity Broking and Angel Broking have kept the positive outlook for the IPO, with Subscribe rating. On the other hand, Kotak Securities, ICICI Direct and Axis Capital assigned 'None' rating to the IPO. At the higher price band of Rs. 94 per share, the IPO is valued at 21.4x EPS and 8.9x EBITDA for FY20.Stocks in news: GAIL, Jubilant FoodWorks, Jindal Stainless, Bharti Airtel, Shree CementShare Market Live: Sensex rises 70 points, Nifty at 15,215; ONGC, IndusInd Bank, SBI top gainers