RailTel Corporation of India, a miniratna PSU, has received approval from capital markets regulator Securities and Exchange Board of India (Sebi) to raise Rs 700 crore through an initial public offering (IPO). The IPO will be an offer-for-sale through which the government will offload 8.66 crore equity shares, according to draft papers filed with Sebi. The opening and closing dates of the primary market offering have not been announced thus far. The shares will be listed on both the benchmark indices.
The company had filed its IPO papers in October and received the regulator’s observation on November 6. Any company can launch an initial public offering, follow-on public offer and rights issue only after the regulator’s observation.
The net proceed from the IPO will be used by the company to carry out its disinvestment plan and to achieve the benefits of equity share listing on the stock exchanges.
The Cabinet had approved the IPO of RailTel Corporation way back in December 2018, for diluting government stake of up to 25 per cent.
Incorporated in 2000, RailTel Corporation is one of the largest neutral telecom infrastructure provider in the country. It is owned by the Government of India and administrated by the Ministry of Railways. RailTel owns an optical fibre network on exclusive Right of Way (RoW) along the railway track, and provides broadband telecom and multimedia networks across the country.
As on June 30, 2020, the company’s optical fibre network covered more than 55,000 kms and 5,677 railway stations across towns and cities in the country.
ICICI Securities, IDBI Capital and SBI Capital Markets are merchant bankers of the public issue, while KFintech is the registrar to the issue.