RailTel Corporation of India files DRHP for Rs 700 crore IPO

RailTel Corporation of India files DRHP for Rs 700 crore IPO

State-owned RailTel Corporation of India, one of the largest neutral telecom infrastructure services providers, has filed its draft red herring prospectus (DRHP) with capital market regulator Sebi for its initial public offering on September 29.

Sources said the company is expected to raise approximately Rs 700 crore.

RailTel is a a category 1 mini-ratna central public sector enterprise, wholly owned by the Government of India under the administrative control of the Ministry of Railways.

As the objective of the issue is to disinvestment the government’s stake, the company will not receive any proceeds from the offer.

The issue consists an offer for sale of 8,66,53,369 shares and employee reserved portion by the Government of India.

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Incorporated in 2000, RailTel provides telecom network and infrastructure services, managed data centre and hosting services, and system integration services to government and non-government customers.

The company was incorporated with the aim of modernising the existing telecom system for train control, operation and safety, besides creating a nationwide broadband and multimedia network by laying optical fibre cable along the railway tracks.

As on June 30, its optic fibre network covers over 55,000 km and 5,677 railway stations across towns and cities in the country.

It has also been selected for implementation of various mission-mode projects for the government including rolling out the National Knowledge Network (NKN), Bharat Net and optical fibre-based connectivity project in northeast India. It also undertakes Information & Communication Technology (ICT) projects.

Its operations have been funded entirely by internal accruals since 2013 and it currently enjoys a debt free status. Revenue from operations grew at 7.47 percent compounded annual growth rate (CAGR) during FY18-20.

ICICI Securities, IDBI Capital and SBI Capital Markets are appointed as book running lead managers to the issue.