State-owned telecom infrastructure provider RailTel has filed Draft Red Herring Prospectus (DRHP) with the market regulator SEBI for an initial public offer (IPO) of up to 8.66 crore equity shares. 

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The issue consists of an offer for sale of 8,66,53,369 shares and employee reserved portion by the Government of India. 

The company is expected to raise approximately Rs 700 crore via OFS by the government. ICICI Securities, IDBI Capital, SBI Capital Markets are appointed as the book running lead managers to the issue. The objective of the issue is to disinvestment the government's stake, the company will not receive any proceeds from the offer.

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The operations of the company have been funded entirely by internal accruals since 2013 and it enjoys a debt-free status at present.

RailTel, incorporated in 2000, provides telecom network and infrastructure services, manages data center and hosting services and offers system integration services to government and non-government customers, and aims to modernise the existing telecom system for train control, operations and safety besides creating a nationwide broadband and multimedia network by laying optical fibre cable along the railway tracks. Revenue from operations grew at 7.47 percent compounded annual growth rate (CAGR) during FY18-20.

It serves as a key network for the Indian Railways and has been executing projects of national importance such as National Knowledge Network (NKN) and Bharat Net.

As on June 30, its optic fibre network covers over 55,000 km and 5,677 railway stations across towns and cities in the country.

(Authored by Rahul Kamdar)