The three-day initial public offering (IPO) of the state-owned RailTel Corporation of India will open for subscription on Tuesday. The price band has been fixed at Rs 93-94 a share for the initial share-sale.
RailTel Corporation of India, has subscribed 1.57 times so far in morning on February 16, the first day of bidding.
The IPO is entirely an offer-for-sale through which the government will offload 87,153,369 equity shares, amounting to 27.16 per cent stake. Half of the issue is reserved for qualified institutional buyers, 35 per cent for retail investors, and 15 per cent for non-institutional bidders.
“At the upper end of the price band of Rs 94, the company’s IPO is valued at P/E of 21x on FY20 EPS which is decent and P/E of 34x on annualised H1FY21 EPS which looks fairly valued. The company is expected to enjoy premium post listing owing to absence of major players in the listed space,” said Ajcon Global which recommended subscribing the issue.
RailTel was incorporated in September 2000 with the aim of modernising the existing telecom system for train control, operation and safety and to generate additional revenues by creating nationwide broadband and multimedia network by laying optical fiber cable by using the right of way along railway tracks.
The company has successfully completed a number of long-term projects for provision of ICT services across India. These include the NKN and Bharat Net (formerly, the National Optical Fiber Network) projects for providing high capacity bandwidth pipes and laying optical fiber cable for connectivity of gram panchayats in India.
