RailTel Corporation of India, a Miniratna PSU, has received approval from the capital markets regulator Securities and Exchange Board of India (SEBI) to raise Rs 700 crore through an initial public offering (IPO). According to the draft papers filed with Sebi, the IPO will be an offer-for-sale through which the government will offload 8.66 crore equity shares. The start and end dates of the primary market offering have not yet been announced. Shares will be listed on both benchmark indices.
The company had filed its IPO papers in October and received regulatory observations on 6 November. Any company can launch an initial public offering, a follow-on public offer and a rights issue only after the regulatory observation.
The net proceeds from the IPO will be used by the company to carry out its divestment plan and reap the benefits of equity share listing on stock exchanges.
In December 2018, the cabinet had approved to increase RailTel Corporation’s IPO by 25 per cent.
Incorporated in 2000, RailTel Corporation is the nation’s largest neutral telecommunications infrastructure provider. It is owned by the Government of India and administered by the Ministry of Railways. RailTel owns an optical fiber network on the right-of-way (RoW) exclusive along the railway track, and provides broadband telecom and multimedia networks across the country.
As of June 30, 2020, the company’s optical fiber network covered 55,000 kilometers and 5,677 railway stations in towns and cities across the country.
ICICI Securities, IDBI Capital and SBI Capital Markets are merchant bankers to the public issue, while KFintech is the registrar of the issue.