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ISSUE HIGHLIGHTS
Founded in 2000, RailTel is one of the largest neutral telecom infrastructure providers in the country. It is the 7th issue to hit the equity markets in the year. The company can raise INR 819 crores at upper price band.
The issue includes a reservation of up to INR 5,00,000 worth of equity shares (1,250 equity shares) for subscription by eligible employees
Issue Details
Strengths
- Among the largest neutral telecom infrastructure providers in India with pan-India optic fiber network
- Diversified portfolio of services & solutions
- Key partner to the Indian Railways in digital transformation
- Experience in executing projects of national importance with a robust pipeline of projects
- Strong track record of financial performance
Valuation
The company reported its EPS at INR 4.4 per share for the year ending March 2020, bringing the IPO valuation to a P/E of 21.4 at upper price band, against sector PE of 30.4.
We recommend to apply for the issue on the basis of its strong financials and high prospects of the industry growth.
Issue Break-Up
Objects of Offer
The company will not receive any proceeds from the issue and will entirely to the Selling Shareholders.
Background highlights of the company in brief
- RailTel Corporation, a “Mini Ratna (Category-I)” PSU is one of the largest neutral telecom infra providers in the country owning a Pan-India optic fiber network on exclusive Right of Way along Railway track.
- RailTel was incorporated on September 26, 2000 with the aim of modernizing the existing telecom system for train control, operation and safety and to generate additional revenues by creating nationwide broadband and multimedia network, laying optical fiber cable using the right of way along railway tracks.
- The company’s portfolio of services can be broadly classified in to Telecom Network Services (NLD Services, ISP Services), Telecom Infrastructure Services (IP-1 Services), Managed Data Center and Hosting Services (Data Centre and Managed Hosting Services, TPaaS), Projects (System Integration Services).
- The company’s expertise includes: HD Video Conferencing Services, Data Center Services, RailWire, Leased Line, Virtual Private Network, Internet Leased Line, Managed Data Services, Consultancy Services, Rack and Space Collocation, Tower Collocation, NLD for Voice Carriage, Signaling Services.
- RailTel has a strategic relationship with the Indian Railways and it undertakes a wide variety of projects including provision of mission critical connectivity services such as video surveillance system at stations and within trains, ‘e-Office’ services and implementing short haul connectivity between stations and long haul connectivity to support various organizations within the Indian Railways.
- It also undertakes various passenger services including content on demand services and Wi-Fi across major railway stations in India.
- Presently, optic fiber network of RailTel covers over 58,742 route kilometers and covers 5,848 railway stations across towns and cities in India.
- In the past, it has undertaken various mission-mode projects for the Government of India including rolling out the National Knowledge Network, Bharat Net (formerly, the National Optical Fiber Network) and USOF funded optical fiber based connectivity project in North East India.
- As for the telecom industry, there is likely to be a minimal impact of COVID-19 on telecom companies. The industry might have taken a small hit during the hit, which was a short-term effect due to limited availability of smartphones in the market.
Briefing about directors & key managerial personnel
Briefing Financials
Balance Sheet
Statement of Profit and Loss
Key Ratios
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