On Tuesday (February 16), state-run RailTel’s initial public offering (IPO) will be open for subscription. The company, which is planning to raise Rs 819 crore via IPO route, has fixed the price band at Rs 93-94 per share.
Now, in the grey market the shares of the telecom infrastructure providers in India is trading 50 per cent higher from the price band. Over the weekend, it was trading around 40 per cent.
The offer of the company will close on February 18, 2021
What makes the company attractive to investors:
It is a debt free company. The revenue from operations of this state-run company grew at a CAGR of 7.47 per cent during the financial year 2018-2020.
Incorporated on September 26, 2000, Railtel has been profitable since fiscal 2007.
It had paid dividends since fiscal 2008.
Its net profit margin of 12.50 per cent in fiscal 2020 was the highest among the key telecom companies and key IT/ICT companies in India and was 8.48 per cent in the six months ended September 30, 2020.
In fiscal 2020, RailTel had the highest return on capital employed (RoCE) among key telecom companies and key IT/ICT companies in India, with a RoCE of 14 per cent and was 4.64 per cent in the six months ended September 30, 2020.
The company has optic fiber network cover of over 59,098 route kms and covers 5,929 railway stations across towns and cities in India. It is a neutral telecom infrastructure that will host telecom players at railway stations in India. It is a neutral telecom infrastructure that will host telecom players at railway stations in India.
According to Axis Capital, post issue the market capitalisation of the company is estimated at Rs 2,985 - 3,017 crore.