Government-owned RailTel Corporation of India share today was listed at the first trading price at 109, up 15.96 percent premium, on the National Stock Exchange, against an issue price of Rs 94.
On the BSE, the share shot up to 11.28 percent to Rs 104.60. The listing was along expected lines, with analysts predicting the stock to debut at a 10-20 percent premium.
At 1044 hours, the charts showed RailTel Corporation reaching a day’s high at Rs 123.65 on NSE.
The public issues have brought to Railtel’s exchequer Rs 819 crore, the proceeds of which will go to the union government. The government had offered the company a complete sale under its FY21 divestment program.
Railtel, which is is one of the largest neutral telecom infrastructure providers in India, has become the seventh listing of 2021.
The company had the exclusive rights to lay optical fiber cable and as of January 2021, it has connected 7,321 railway stations along 67,415 route kilometers of the railway line.
The company has 59,098 route kilometers of OFC network, connecting 5,929 railway stations across towns and cities in India.
It also has a citywide access network of over 18,000 km and offers a high-capacity bandwidth of up to 800G at 87 locations in India. The company also offers leased line and VPN facilities along with IP-1 services.
Equity analysts said the company plays a stellar role in the digital transformation of the Indian Railways.
Compared to other telecom players, Railtel has better margins and return ratios. It also is a debt-free company and has been paying dividends consistently, they said.
The firm is profitable since FY07 and has paid a dividend since FY08. The average dividend payout stood at around 40 percent over FY18-20.
Also, no other peer companies are listed, and therefore Railtel has a big advantage over them, in terms of strong future growth rates, the analysts added.
The company has also tied up with telecom companies and multiple system operators (MSO) to lease bandwidth and offer last-mile optical fiber cable network connectivity across cities and towns in India.
The company reported a 7.5 percent CAGR rise in the topline in FY20 and total operating expenditure increased by 5.6 percent CAGR (a rate lower than topline growth) over FY18-20, thereby leading to a 12.4 percent CAGR rise in EBITDA in FY20.
EBITDA margin expanded from 27 percent in FY18 to 29.6 percent in FY20. Adjusted PAT increased by 8.9 percent CAGR over FY18-20. Its average RoIC and RoE stood at 8.6 percent and 10.6 percent, respectively, over FY18-20.
Prior to Railtel, Indian Railways Finance Corporation, Indigo Paints, Home First Finance Company, Stove Kraft, Brookfield India REIT, and Nureca, were listed on both BSE and NSE bourses.
