Govt plans to launch RailTel IPO after Budget 2021, likely to pare 26% stake via OFS

The government is likely to launch the much-awaited RailTel IPO this fiscal after the announcement of the Union Budget 2021 for the financial year 2021-22. According to sources, it is likely to pare its 26% stake in RailTel through an offer for sale or OFS. A high-level committee will be called soon in this regard.

"The government may sell 26 per cent stake in RailTel through OFS. No fresh equity will be given. A high-level committee will be called to soon to take a decision in this regard," a source privy to this information, who didn't wish to be quoted, told Zee Business exclusively.

RailTel is a mini ratna PSU which provides nationwide broadband telecom and multimedia network in all parts of the country in addition to modernization of Train operations and administration network systems.

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Besides RailTel, the government is also likely to launch IPO of its financing arm IRFC in January. It is likely to garner Rs 3000, crores by selling its 15% stake - 10% through fresh equity and 5% through OFS.

The Union Cabinet in April 2017 had approved the listing of five railway companies. So far, the government has successfully listed IRCON International Ltd, RITES Ltd, Rail Vikas Nigam Ltd and Indian Railway Catering and Tourism Corp.

According to the government data, the Department of Investment and Public Asset Management (DIPAM), has been able to garner only Rs 13,844 crore so far, against the steep target of Rs 2.10 trillion for FY21. Last year, it had a target of Rs 1.05 trillion but it had to reduce it to Rs 65,000 crore.