RailTel Corporation of India, a miniratna power supply, has received approval from the Securities and Exchange Board of India (Sebi) financial market regulator to raise Rs 700 crore through an IPO in stock exchange (IPO). The IPO will be an offer to sell whereby the government will get rid of 8.66 crore of shares, according to draft documents filed with Sebi. The opening and closing dates of the offer on the primary market have not yet been announced. The shares will be listed on both benchmarks.
The company had filed its IPO documents in October and received the regulator’s comment on November 6. Any company can only launch an initial public offer, a follow-up public offer and a rights issue after the regulator has observed it.
The net proceeds from the IPO will be used by the company to complete its divestment plan and benefit from the benefits of listing the shares on the stock exchange.
The Cabinet approved RailTel Corporation’s IPO in December 2018, for diluting the government’s stake to 25%.
Incorporated in 2000, RailTel Corporation is one of the largest providers of neutral telecommunications infrastructure in the country. It is owned by the Indian government and is administered by the Ministry of Railways. RailTel has a fiber-optic network on the exclusive right-of-way along the railway line and provides broadband telecommunications and multimedia networks across the country.
As of June 30, 2020, the company’s fiber optic network covered more than 55,000 km and 5,677 stations across cities across the country.
ICICI Securities, IDBI Capital and SBI Capital Markets are investment bankers of the public issue, while KFintech is the registrar of the issue.