- State-owned broadband and VPN services company RailTel plans to go public in January next year
- The tech giant targets to raise about Rs. 300 ($42 million) for a 25% stake in the company
- RailTel is currently sourcing for an advertiser for its planned IPO
Indian government-owned broadband and VPN services enterprise RailTel is planning to issue an Initial Public Offering that is aimed at raising Rs 300 crore (($42 million). The government wishes to cede a 25% stake in the company in exchange for the money that will largely go towards scaling the operations of the company.
RailTel is currently sourcing for an advertising partner who will oversee its entire IPO process and hopefully start trading in January 2020.
“The Department of Investment and Public Asset Management (DIPAM) requires services of a reputed advertising agency with experience and expertise in public offerings in capital markets to act as an advertising agency for RailTel IPO,” the Disinvestment Department said.
The window for opportunity to partner with the firm closes on 28 Nov and the advertising costs will be borne by DIPAM, RAILTEL and the BRLMs (Book Running Lead Managers).
The Miniratna PSU firm is the brand behind the upgrading of Railway stations into Digital hubs by providing public Wi-Fi at major Railway stations. As of today, RailTel has connected more than 4900 railway stations with Rail Wire Wi-Fi.
In the 2018-2019 financial year, RailTel recorded revenue of Rs.1017 crore and posted a Profit before Tax of Rs. 179 crore and net profit of Rs.110 crore. The company achieved a dividend payout of Rs. 62.20 plus an interim dividend of Rs.18 crore for the 2018-19 FY.
Shri Puneet Chawla, RailTel’s chairman, and MD recently released the figures to shareholders and laid down to them their latest developments and future plans including a plan to issue an IPO next year.
RailTel is among the largest providers of neutral telecom services in India owning a Pan-India optic fiber network spread across all major towns & cities.
The Cabinet Committee on Economic Affairs approved the plan to issue IPOs for six corporations, RailTel being one of them. The tech company’s IPO comes not long after the Indian Railways Catering and Tourism Corporation (IRCTC) went public. IRCTC’s IPO was one of the most phenomenal in the history of Indian IPOs having received an overwhelming response from the market, netting 111 times more subscribers than they initially planned to. With the right measures in place, RailTel has the potential to beat that figure by a decent margin, experts say.