IPO Alert: RailTel Corporation files DRHP for Rs 700 crore IPO — 10 things about the company

Telecom infrastructure services provider, RailTel, a government-owned enterprise is looking at raising Rs 700 crore through an initial public offering (IPO). ICICI Securities, IDBI Capital, SBI Capital Markets Ltd are appointed as the Book Running Lead Managers (BRLMs) to the issue. The company had filed a draft red herring prospectus (DRHP) respectively.

Incorporated in 2000, RailTel provides telecom network and infrastructure services, managed data center and hosting services and system integration services to the private and public sectors.

Ten things about the company:

  1. RailTel Corporation of India is a miniratna and comes under the administrative control of the Ministry of Railways.

  2. The key project of RailTel is providing free public Wi-Fi service at Indian railway stations. It has started providing the free public Wi-Fi service at 985 Indian railway stations with own/other funding.

  3. Competitors of RailTel in the Information and Communications Technology space are HCL Infosystems Limited, Sify Technologies Limited, Tata Communications Limited, and Telecommunications Consultants India Limited.

  4. RailTel ranked considerably well in operational profitability in fiscal 2020. RailTel’s operating profit margin was 30 per cent in fiscal 2020, whereas Vodafone Idea Limited and Reliance Jio Infocomm Limited was 33 per cent and 40 per cent, respectively, in fiscal 2020, stated DRHP. In fiscal 2020, Railtel registered the highest return on capital employed (RoCE) of 14 per cent, followed by Reliance Jio Infocomm Limited at 13 per cent in the same period.

  5. Since 2013, the operations of the company have been funded entirely by internal accruals and currently enjoy a debt-free status.

  6. At present, RailTel Corporation aims to modernise the existing telecom system for train control, operations, and safety besides creating a nationwide broadband and multimedia network by laying optical fiber cable along the railway tracks.

  7. As of June 30, 2020, its optic fiber network covers over 55,000 kms and 5, 677 railway stations across towns and cities in the country.

  8. The company is a key network for the Indian Railways.

  9. It is implementing projects of national importance such as the National Knowledge Network (NKN) and Bharat Net.

  10. For the year March 31, 2020, the company has reported Rs 184.76 crore in profit before taxes, as per DRHP. Meanwhile, profit after tax stood at Rs 141.06 crore.

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