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Last Updated : Jan 28, 2020 08:52 AM IST | Source: Moneycontrol.com

ITI FPO subscribed 9%, retail category subscription at 50% on Day 2

The government's shareholding will be reduced to 74.96 percent, from 90 percent currently after the issue.

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The State-owned telecommunications technology company, ITI (Indian Telephone Industries) was subscribed 9 percent on January 27, the second day of bidding.

The Rs 1,400-crore further public offer (FPO) has received bids for 1.37 crore equity shares against offer size of 18.18 crore shares, as per data available on the NSE.

The reserved category for retail investors has seen subscription of 50 percent and that of qualified institutional buyers 5 percent and non-institutional investors 1 percent.

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The price band for the issue, which will close on January 28, was fixed at Rs 72-77 per share.

The company intends to use issue proceeds for funding its working capital requirements as well as repayment of existing debt.

The government's shareholding will be reduced to 74.96 percent, from 90 percent currently after the issue.

ITI has order book of Rs 11,051.12 crore as of December 2019, of which 29.09 percent comprises large turnkey projects, 57.87 percent comprises AMCs and 13.05 percent comprises other product and services orders.

It has 5 manufacturing units located at Mankapur, Bengaluru, Palakkad, Naini and Raebareli. It also has an R&D center in Bengaluru.

The company enjoys established relationships with customers such as Bharat Sanchar Nigam (BSNL), Bharat Broadband Network (BBNL), Mahanagar Telephone Nigam (MTNL), Indian Army, Defence etc.

The company is also engaged in some government projects such as ASCON, BharatNet, Smart Energy Meters, and E-Governance Projects.

"The company is transforming itself from a telecommunications equipment manufacturer to telecommunications Technology Company catering to diverse industry segments. The business of the company is capital intensive and the company has seen erosion in its profits. Even though it has healthy order book but the execution level is slow. A long term investor may opt the issue," said SMC Global which has rated the issue at 2 out of 5 in terms of ranking.

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First Published on Jan 28, 2020 08:52 am
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