RailTel Corporation (RailTel) IPO II Share face value, employees quota, price band, strength to issue last date - Axis Securities highlights OFS

RailTel Corporation of India Limited (RailTel) initial public offer (IPO) opened today through an offer for sale (OFS) of up to 8.71 cr equity shares with a face value of Rs. 10 per share, aggregating to Rs 819 cr. Of this, 500000 shares will be reserved for eligible employees. RailTel has fixed the price band of Rs 93-94 per share. As this is an OFS, RailTel will not receive any proceeds from the offer and all the proceeds shall go to the Government of India. The issue opens today and last date on Feb 18th 2021. ICICI Securities, IDBI Capital, SBI Capital are the Book running lead managers of Railtel.

Avinash Gorakshakar Head Research at Profitmart Securities highlights that the strength that RailTel enjoys is the fact that it gets first priority on all the Indian Railways contracts. The railways are currently undergoing a digital transformation. In the next few years, public Wi-Fi will be provided at all railway stations and entertainment content would be made available for travellers. This presents a huge opportunity for RailTel’s growth and expansion. RailTel offers enterprise data services to companies. There is an increasing demand from companies, which are shifting their operations to digital platforms and hence, the growth opportunity for RailTel becomes clear.

See Zee Business Live TV Streaming Below:

Goralshakar says that RailTel is also appointed by the Ministry of Railways for implementation of the Hospital Management Information System. The demand for digital services is increasing, which is also augmenting the optical fibre network. Focus on rural fiberisation will help the long-term growth prospects of RailTel as well. As India turns into a lucrative 5G opportunity, RailTel will be a key beneficiary. Looking at the huge capital expenditure required by Indian Railways, we believe that the company will keep growing its business at a healthy rate, and hence, you can invest with limited exposure.

Railtel portfolio of services can be broadly classified as:

Telecom Network Services National Long Distance (“NLD”) Services
Internet Service Provider (“ISP”) Services
Telecom Infrastructure Services
Managed Data Center and Hosting Services
Projects (System Integration Services)