The central government plans to divest as much as 25% equity in the state-owned RailTel Corporation through an IPO. RailTel IPO is likely to be launched in the first half of the current financial year started April, reported Cogencis newswire agency. The upcoming IPO is likely to mobilize up to INR300 crore (INR3 billion).
“We have asked the company to finalise its financial results and file for regulatory approvals. Our effort will be to bring the IPO by the second quarter,” the report cited an unnamed senior finance ministry official as saying.
RailTel IPO is part of the government’s divestment drive under which, the Cabinet Committee on Economic Affairs (CCEA) approved divestments in six PSUs through IPOs. This plan also included Rail Vikas Nigam which listed last month. Separately, the government has identified rail sector PSUs for IPOs and these include Indian Railway Catering and Tourism Corp (IRCTC) and Indian Railway Finance Corporation (IRFC). For FY2020, the government plans to raise INR90,000 crore through divestment.
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RailTel IPO: PSU yet to file DRHP
While the government is hopeful of launching RailTel IPO by September 2019, it is important to note that the PSU has not yet filed draft prospectus with market regulator SEBI.
RailTel Corporation is a Mini Ratna (Category-I) PSU and is one of the largest neutral telecom infrastructure providers in the country owning a pan-India optic fiber network on exclusive Right of Way (ROW) along Railway track. The company’s OFC network covers all important towns and cities of the country and several rural areas covering 70% of India’s population.
RailTel is a National Long Distance (NLD) Service provider. RailTel is the only neutral player in the country to roll out the NGN (Next Generation Switching Network) based Class 4 switch for carrying NLD traffic across the country. NGN converges the traditional voice data & video on to a Single packet (IP) infrastructure & enables Triple Play services on the same network to the customer. NLD Services, offered to Government departments, Enterprises and Banks, accounted for 38% of its revenues in FY2018.
For the year ended March 2018, the company posted consolidated revenues of INR1,031 crore, marking a growth of 14.04%. IN the same year, net income jumped 23.44% to INR158 crore. On its website, the company mentioned that it has been posting higher revenues in each of the last four years and remains a debt-free enterprise.