RailTel IPO

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The Corona Pandemic had its ill effects on the stock market, however, things looked bright towards the end of the year. Subsequently, the stock market saw the launch of multiple IPOs. The upcoming RailTel IPO will most likely keep things in the same vein.

Many companies are looking to capitalize on these much-improved situations in the stock market as can be seen from the long list of upcoming IPOs which consists of the much anticipated:

The Miniratna telecommunication PSU, RailTel filed DRHP papers with SEBI the last October, in an attempt to go public as they plan to carry out disinvestment.

Their decision to put 25% of the company’s shares available to the public is music to investors’ ears.

An IPO or Initial Public Offering is the perfect path to purchase stocks at the lowest available prices.

Investors consider buying shares directly from a company in the primary markets as the better route for investing than buying the stocks listed on the stock exchanges. 

Investors will have to shell out excessive money for purchasing those listed stocks as there are intermediaries involved in the secondary market.

However, traders save a lot of money by purchasing shares directly from the company through IPO.

RailTel looks to sell shares worth as many as ₹700 cr. In short, RailTel IPO could possibly be the perfect opportunity for investors who have long-term investment goals. 

Follow the below article that contains all the related details to find out more about this public offering. 

RailTel IPO Review

RailTel Corporation of India Ltd is a “Mini Ratna” company of India which was incorporated in the year 2000 to improve the Indian Telecom sector and services. 

The company provides telecom solutions and has exclusive rights to install optical fiber cable along the railway tracks. Currently, the optic fiber network set up by the company covers as many as 5848 railway stations in India

RailTel in its DRHP (Draft Red Herring Prospectus) mentioned the following objective of the IPO. 

– To carry out the disinvestment of upto 25% of Government’s holdings in the company

– To benefit from listing company’s equity shares on the stock exchanges

– As a measure of enhancing the company’s visibility and brand image

– Provide a public market for the Equity Shares

The company, having filed its DRHP papers with SEBI back in October 2020, is all set to sell as many as 8,71,53,369 to raise ₹819.24Cr

Through the IPO, RailTel will be auctioning equity shares for a face value of ₹10. This is entirely an offer-for-sale IPO, which means the whole entirety of 8.66 crore shares will be sold off to the public.

The below table contains all the RailTel IPO details :

 

A massive 8,71,53,369 shares with a face value of ₹10 per equity share are to be sold in the upcoming RailTel IPO. ICICI Securities, IDBI Capital, SBI Capital Markets Ltd have been brought in for handling the issuance of shares during the IPO.

We have attached a table that draws their financial statement over the past 3 years. 

 


RailTel IPO Promoter 

The President of India acting through the Ministry of Railways is the chief promoter for RailTel IPO.

Following is the aggregate pre-offer shareholding of the promoters contributing to the IPO.

 


RailTel IPO Issue Date

Having just recently filed DRHP on December 15, 2020, the actual RailTel IPO Issue Date has disclosed now.

 


RailTel IPO Market Lot

RailTel IPO market lot is another crucial information for the investors looking to participate in the issue. 

 


RailTel IPO Allotment And Listing 

Details about the RailTel IPO allotment is available as below:

 


RailTel IPO Grey Market Premium 

Grey Market Premium (GMP) is defined as the price at which a company’s shares get traded in the grey market. The term Grey market refers to unauthorized marketplaces for trading. 

In other words, any trading activities outside the stock market. The grey market although is unofficial but not illegal and many traders see the Grey market premium as an indicator of an IPO’s performance.

So, the better the GMP, the better the IPO will perform, and the chances of all the shares being sold. 

RailTel IPO Grey Market Premium is around ₹44 – ₹47


How To Apply For RailTel IPO

Traders who want to apply to RailTel IPO can do so through 2 methods. In total, there are many ways to invest in IPOs. However, ASBA is one of the most common and the preferred choice of many traders.

The ASBA (Application Supported by Blocked Account), is a process where a trader pays the money for purchasing specific shares in an IPO.

However, the amount is deducted only after the shares are allotted in the buyer’s demat account.

The investor will need to have a bank account with any of the Self Certified Syndicate Banks (SCSBs). SCSBs are certain banks that adhere to the SEBI regulations. 

A trader should fulfill the below-mentioned criteria for applying for RailTel IPO:

– The applicant needs to have a Demat account

– The applicant should  have a savings account with an SCSB 


Apply For RailTel IPO Through ASBA

There are two methods – online and offline to apply for RailTel IPO through ASBA. The two methods are discussed below:

Online Method

  1. The investor will need to fill the ASBA form available at the NSE official website
  2. The investor will then need to fill the ASBA Form which contains details such as –
  • Name of the applicant 
  • PAN Number
  • Demat Account Number 
  • Bidding details – BId Quantity, Bid Price

The ASBA form gives instructions to the bank to block the amount used for buying shares in an IPO until the shares are credited to the individual’s Demat account. 

3.The form details get verified by the SCSB before the bank uploads the bid on the NSE ASBA system along with all the bids from investors.

Offline Method 

For this, the investor will need to visit the SCSB’s physical branch and file an IPO application by filling the ASBA form.


RailTel Company Information

RailTel Corporation of India Ltd is a Public Sector Undertaking that stands responsible for ensuring broadband as well as VPN services to Indian customers.

The company has the honorary distinction of being one of the largest neutral telecom infrastructure providers in India.

Established in 2000, with the motive of improving the Indian Telecom sector and services. The telecom company is categorized as a “Miniratna” of India. 

The company has been trusted with the responsibility of implementing the “Google Station” Wi-Fi and WiMax projects in the country.

The company has installed optical fiber cable along railway tracks of as many as 5,848 railway stations across India.

RailTel has stated the following objectives for listing the company shares in IPO in their DRHP filed with SEBI – 

  • To carry out the disinvestment of upto 25% of the Government’s holdings in the company
  • To benefit from listing company’s equity shares on the stock exchanges
  • As a measure of enhancing the company’s visibility and brand image
  • Provide a public market for the Equity Shares

Conclusion

RailTel IPO is among the safest primary sector offerings because of the company profile. Being a Public Sector Undertaking, RailTel fares better on the trust factor than any other private player.

The company looks to offload almost a quarter of its holdings through an offer for sale of as many as 8,71,53,369 crore shares. RailTel through its ₹819.24 Cr IPO looks to provide a public market for equity shares.

So, investors looking for the best stocks for long term investment opportunities most definitely should look to buy shares through Railtel IPO.

Moreover, the prospect of a heavy return on investments makes the initial prices paid for purchasing shares look like a bargain.

Wish to invest in IPO? Open a Demat Account by referring to the below form

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