RailTel IPO: Incorporated in September 2000, RailTel is a Mini Ratna (Category I) Central Public Sector Enterprise, wholly owned by the Government of India and under the administrative control of the Ministry of Railways. The company is an Information and Communications Technology (ICT) infrastructure provider and is one of the largest neutral telecom infrastructure providers in India.
 
RailTel IPO Structure and Offer Details:
 
The proposed issue comprises an offer for sale of 8.7 cr  shares by the President of India, acting through the Ministry of Railways, Government of India, aggregating to a sum of Rs. 819.2 cr (at upper price band). The price band for the issue is in the range of Rs. 93-94 and the bid lot is 155 shares and multiples thereof.
 

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During FY18-20, RailTel’s revenue grew at a 7.5% CAGR to Rs. 1,128 cr in FY20. Over the same period, its EBITDA grew at a CAGR of 12.4% to Rs. 334 cr in FY20 while the net profit grew at a CAGR of 2.6% to Rs. 141 cr in FY20.
 
RailTel has a pan-India optic fiber network and is among the largest neutral telecom infrastructure providers in the country. As of 31st January 2021, RailTel has exclusive right of way along 67,415 route kilometers connecting 7,321 railway stations for laying optical fiber cable and offers high capacity bandwidth of up to 800G at 87 locations in India. RailTel’s pan-India network comprises various technologies including next generation network (NGN), packet transport network, DWDM and IP-MPLS.
 
The company offers a diverse range of services including telecom network services, telecom infrastructure services, managed data center and hosting services and projects (system integration services) across various industries.
 
RailTel is a key partner to the Indian Railways in digital transformation. RailTel provides a variety of services to the Indian Railways and is also working with the Indian Railways to transform railway stations into digital hubs by providing public Wi-Fi at railway stations across India.
 
RailTel plans to continue investing in expanding its network and deploying latest technologies to enable a high capacity next generation network. Its extensive network is a key differentiator and a key value proposition.
 
RailTel aims to further diversify its operations by providing services and solutions that have high market attractiveness. RailTel also intends to offer services selectively to countries other than India and leverage its existing technology to implement its capabilities in other countries.
 
RailTel Valuation:
 
At the upper price band of the IPO, RailTel is valued at 21.4x FY20 PE