RailTel IPO Overall Subscribed 42.42 times on Day 3
Retail Category highest subscribed amongst Railway PSU IPOs, with 16.78 times subscription
RailTel Corporation of India Limited (“RailTel”), one of the largest neutral telecom infrastructure providers in the country, received bids of 2,59,42,43,370 shares against the offered 6,11,57,360 equity shares, as per the 5:00 pm Day 3 data available on the bourses. The portion reserved for retail investors was subscribed 16.78 times. While the Qualified Institutional Buyer was subscribed 65.29 times, the Non-Institutional Investor category was subscribed 73.25 times. The employee reservation category was subscribed 3.35 times. The total size of the offer is of Rs. 819.24 cr at the upper price band of Rs. 94 per share. The Retail category observed highest subscription as compared to other IPOs in the segment like IRFC, IRCTC, IRCON, RVNL & RITES. The issue received approximately 23,79,717 applications for the IPO which is second highest, after IRFC, amongst the Railway PSU category.
Speaking on the good response garnered by the investors from Issue opening to closing, Mr. Puneet Chawla, Chairman and Managing Director, RailTel Corporation Of India said, “It is heartening to see the overwhelming response from investors across all categories. The overall 42.42 times oversubscription speaks volume of the faith the investors in QIB, NII and RII categories have shown in our company. Infact our employee quota has also been oversubscribed which shows the enthusiasm of the RailTel family. I assure all investor that we will leave no stone unturned to honor their faith in us.”
The Offer comprises of 87,153,369 equity shares of face value of ₹10 each and is a complete offer for sale by the Government of India; therefore the Company will not be directly receiving any proceeds from the same. The minimum bid lot is of 155 equity shares, thereafter in multiples. The price band has been fixed at Rs. 93 – Rs. 94 per Equity Share.
RailTel offers a diversified portfolio of ICT services and solutions including MPLS-VPN, leased lines services, TPaaS, e-Office services and data center services, large network hardware system integration, software and digital services to enterprises, public sector banks, defense organisations and educational institutions; operated through Tier III data centers located in Gurugram, Haryana, Secunderabad and Telangana to host and collocate critical applications for customers including the Indian Railways. RailTel is also empanelled with MeitY as a cloud service provider and offers services under the brand name of ‘RailCloud’. RailTel also provides broadband services to retail customers and MSMEs under the brand name of ‘RailWire.’
The Indian telecom industry has undergone significant disruption over the past two years. India's internet subscriber base (wireless and wired) is estimated to have reached approximately 690 million at the end of Fiscal 2020, according to the Telecom Regulatory Authority of India (“TRAI”) and it is further expected the base will expand at a CAGR of approximately 5% to 7% between Fiscal 2020 and Fiscal 2025. This is a good opportunity for businesses like RailTel to grow exponentially along with the industry considering the related services it offers.
ICICI Securities Limited, IDBI Capital Markets & Securities Limited and SBI Capital Markets Limited are appointed as the BRLMs to the Offer.
(Subscription table below)