RailTel IPO fully subscribed within hours, retail portion booked 2.2 times

RailTel Corporation

MUMBAI: State-owned RailTel Corporation of India’s Rs819 crore initial public offer (IPO) was fully subscribed on Tuesday, the first day of bidding, largely led by demand from retail investors.

The issue has been priced at Rs93-94 apiece, and the offer closes on 18 February.

So far today, the issue has received bids for 7.76 crore equity shares against the 6.11 crore on offer, according to the data available on the exchanges.

The retail portion was subscribed 2.25 times, and that resaved for employees 16%. The portion set aside for non-institutional investors was subscribed 23%. Qualified institutional buyers had not put in their bids yet.

ICICI Securities, IDBI Capital Markets & Securities and SBI Capital Markets are managing the IPO.

The company had raised Rs244 crore from anchor investors on Monday. The telecom infrastructure provider allocated 25.96 million shares at Rs94 apiece to anchor investors, including Aurigin Master Fund and Utilico Emerging Markets Trust, Cohesion MK Best Ideas Sub-Trust, Integrated Core Strategies Asia and Goldman Sachs India.

Amongst domestic investors, HDFC Life Insurance picked up the largest allocation of 14.34% for Rs34.99 crore, followed by Nippon Life MF which picked up 12.29% amounting to Rs29.99 crore. ICICI Prudential MF across 4 schemes, HDFC MF across 4 schemes, IIFL Mutual Fund via its Focused Equity Fund, Tata Mutual Fund via its Digital India Fund, and Edelweiss Mutual Fund across 4 schemes have also acquired shares. Edelweiss AIF through its Crossover Opportunities Fund Series II also participated in the anchor round.

The issue comprises an offer-for-sale through which government will offload 87.15 million equity shares, or 27.16% stake. The objective of the issue is to divest the government’s stake, hence the company will not get any proceeds from the offer.

“At the upper price band of Rs94, RailTel is available at a price to equity of 21.4 times on FY20 basis, which appears fully priced. Considering, increasing data usage, GoI’s digital India initiatives and further diversification plans of RailTel,” said Geojit Financial Services, which has recommended subscribing the issue.

For fiscal 2020, the company reported a revenue of Rs1.128.05 crore, up 12.4% from a year ago, while net profit rose 4.2% to Rs141.07 crore.

News Source:- livemint

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