State-owned RailTel Corporation of India Ltd has received capital markets regulator Sebi's go-ahead to raise Rs 700 crore through an initial share-sale.
The initial public offer (IPO) is entirely an offer-for-sale through which the government will offload 8.66 crore equity shares, according to draft papers filed with Sebi.
The company, which filed its IPO papers in October, obtained the regulator's observation on November 6, an update with Securities and Exchange Board of India (Sebi) showed on Monday.
The regulator's observation is necessary for any company to launch public issues like initial public offering, follow-on public offer and rights issue.
According to merchant banking sources, the IPO is estimated to fetch Rs 700 crore.
The miniratna PSU is one of the largest neutral telecom infrastructure providers in the country, owning an optical fibre network on exclusive Right of Way (RoW) along the railway track.
The company provides broadband telecom and multimedia networks across the country.
As on June 30, 2020, its optical fibre network covers over 55,000 kms and 5,677 railway stations across towns and cities in the country.
ICICI Securities, IDBI Capital, SBI Capital Markets Ltd are merchant bankers to the issue.
In December 2018, the Cabinet had approved the IPO of RailTel Corporation for diluting up to 25 per cent government stake.