State-owned RailTel Corporation of India, one of the largest neutral telecom infrastructure providers in the country, has raised Rs 243.99 crore from 14 anchor investors on February 15, a day before the opening of its initial public offer.
The company informed exchanges that it has allocated 2,59,57,446 equity shares at Rs 94 per share to anchor investors including five foreign portfolio investors and six mutual funds.
The five foreign portfolio investors which had participated in the anchor book are Goldman Sachs India, Utilico Emerging Markets Trust, Cohesion MK Best Ideas, Singapore-based Integrated Core Strategies Asia and Aurigin Master Fund.
Domestic investors include HDFC Life Insurance Company, Nippon Life MF, ICICI Prudential MF, HDFC MF, IIFL Mutual Fund, Tata Mutual Fund and Edelweiss Mutual Fund.
The Rs 819.24-crore public issue of RailTel Corporation opened for subscription on February 16 at a price band of Rs 93-94 per share. The issue will close on February 18.
As it is a complete offer for sale issue, the company will not receive any funds from IPO and all the money will go to the Government of India.
RailTel Corporation is an information and communications technology (ICT) infrastructure provider and one of the largest neutral telecom infrastructure providers in India. It is a Mini Ratna (Category-I) Central Public Sector Enterprise.
As of January 2021, its optical fibre network covers 59,098 kilometres across 5,929 railway stations. It also serves as a key network for the Indian Railways.
RailTel intends to create open radio access networks, small cell and tower infrastructure at railway stations for hosting telecom players to assist with their preparation for the 5G network. Further, it plans to continue to invest in expanding its network and deploying the latest technologies to enable a high capacity next-generation network to deliver sustained value to its customers and improve their experience. It also intends to diversify and expand its services and solutions.
"The financial performance of the company has been tepid with revenue and PAT CAGR of 7.5 percent and 2.6 percent respectively over FY18-20. However, it has consistently paid a dividend since FY08. On the valuation front, the company is valued at a PE of 21.4x FY20 EPS. From a long-term perspective, investors can consider applying for the IPO," said Ajit Mishra, VP Research at Religare Broking.ICICI Securities, IDBI Capital Markets & Securities and SBI Capital Markets are the book-running lead managers to the issue.