- RailTel’s IPO (Initial Public Offer) witnessed the highest ever retail participation among the six initial public offerings from The Indian Railways Financial Corporation (IRFC) to hit the stock market at 16.78 times the quota limit. To this, this company/enterprise received more retail bids than RITES’ 14.74 times and IRCTC’s 14.95 times.
- It is a government-owned information and communications technology (ICT) infrastructure provider firm and India’s largest neutral telecom infrastructure provider. This was the seventh initial public offering this year and second by the Ministry of Railways after it recently pared stake in Indian Railway Finance Corporation IPO— which listed at a 4% discount last month.
- The IPO allotment status announcement is to be made on February 23, 2021 on Tuesday completing the share allotment issue whereas the credit for the equity shares shall be carried out on Thursday prior to the Initiation of refundings on Wednesday.
- Investors, who have bid for the issue, can check the subscription status on the online portal of KFintech Private Limited, the registrar to the issue. A registrar is a Sebi-registered entity, qualified to act as such and electronically processes all applications and carries out the allotment process as per the prospectus.
- The IPO was subscribed 42 times and generated bids worth more than ₹259.42 crore against the offer size of 6.12 crore shares. The portion of the IPO reserved for retail investors was subscribed 16.78 times, whereas the qualified institutional buyer was subscribed 65.29 times.
- It would be worth watching if this high demand will reflect as listing gains on February 26, when the stock will hit the bourses. The shares were trading at a premium of ₹25-30 a piece in the grey market, ahead of the listing. However, the grey market is not an official measure of the market premium. But it is a fair indicator of demand for the shares in the market.
- The President of India acting through the Ministry of Railways (MoR) is the promoter of the company.
- IRFC, set up in 1986, is a dedicated financing arm of the Indian Railways for mobilizing funds from domestic as well as overseas markets. Its primary objective of IRFC is to meet the predominant portion of ‘extra-budgetary resources’ requirement of the Indian Railways through market borrowings at the most competitive rates and terms.
- Five Railway Companies were approved in April by the Union Cabinet, 2017 listing down four of them namely:
- IRCON International Ltd.
- RITES Ltd.
- Rail Vikas Nigam Ltd.
- Indian Railway Catering and Tourism Corporation
- State-owned Indian Railway Finance Corporation is seen emerging as an IPO on Jan 18, 2021, at a Price band of Rs.25 to Rs.26 per equity share for a face value of Rs.10 per equity share. The issue continued to remain till Jan 20, 2021. However, the Share of IFRC got listed on both NSE and BSE.
- The book running lead managers to the issue are DAM Capital Advisors, HSBC Securities and Capital Markets (India), ICICI Securities, and SBI Capital Markets.
- Facts about IFRC:
- IRFC was incorporated in 1986,
- It was a public-sector enterprise that was wholly-owned by the Government of India.
- IRFC primarily financed with:
- the acquisition of rolling stock assets
- leasing of railway infrastructure assets
- lending to entities under the Ministry of Railways (MoR).
- It acts as the borrowing arm of Indian Railways.
- IRFC is mainly responsible to raise funds for MoR which are required to not only to procure rolling stock assets like wagons, trucks, electric multiple units, locomotives, coaches, but also its improvement, expansion, and assets management.
- IFRC follows a financial leasing model to finance rolling stock assets procurement for a lease period of 30 years.
- In fiscal 2019, the actual capital expenditures by the Indian Railways were Rs. 1,334 billion, out of which, IRFC financed Rs. 525.35 bn accounting for 39.34% expenditures.
- Facts about RailTel:
- RailTel is a Mini Ratna (Category-I) Public Sector Enterprise.
- It is an information and communications technology (ICT) infrastructure provider
- It is also one of the largest neutral telecom infrastructure providers in India.
- The company was incorporated on 26 September 2000 with the aim of modernizing the existing telecom system for train control, operation and safety and to generate additional revenues by creating nationwide broadband and multimedia network by laying optical fiber cable by using the right of way along railway tracks.
- As of 30 June 2020, its optic fiber network covered over 55,000 route kilometers and 5,677 railway stations across towns and cities in India.
- The company operates data centers in Gurugram, Haryana and Secunderabad, Telangana to host and collocate critical applications for customers including the Indian Railways.
- In addition, it undertakes various ICT projects for the Indian Railways, central government and state governments, including various train control system projects for Indian Railways.
- Facts aboutIRFC-IPO:
- IRFC is coming up for listing with about Rs 4,600 crore issue.
- The IPO will be in a price band of Rs 25-26 per share.
- Anchor book started on January 15 and the main book begin from January 18-20.
- This will be the first IPO by a railway non-banking financial company (NBFC).
- This will also be the first IPO of 2021.
- In January 2020, IRFC had filed draft papers for its IPO.
- The issue is of up to 178.20 crore shares, comprising a fresh issue of up to 118.80 crore shares and offer for sale of up to 59.40 crore shares by the government.
Step-by-Step process to check IPO Allotment Status
- To check RailTel IPO allotment status, go to the BSE (https://www.bseindia.com/) or NSE (https://www.nseindia.com/) official website.
- On BSE, select ‘Equity’ and then from the dropdown, select ‘RailTel’.
- Now, enter your application number and PAN.
- Click on ‘Search’.
- Please note the details will only be available once the shares are allotted.
Step-by-step process to check IPO application status
(By visiting the Registrar Website (KFintech))
- Visitthe registrar’s websitehere.
- Click on ‘Select company’ and click on ‘RailTel’. It will only appear post allotment on February 23.
- Once the company is selected, you will have to enter either your PAN detail, the application number, or client ID.
- Enter the captcha and click ‘submit’.
- Once you hit ‘submit’ the status of your application will appear on the screen. Please ensure the details that you provide are correct. It will show the number of shares that you subscribed to and the number of shares that have been allotted to you.
Company Financials of IFRC
|Particulars||For the year/period ended (Rs in million)|
|30th September 2020||31st March 2020||31st March 2019||31st March 2018|
|Total Revenue||73, 848.29||1,34,210.90||1,09,873.55||92,078.39|
|Profit After Tax||18,868.41||31,920.96||21,399.33||20,014.60|
Important points for IRFC IPO
|IPO Opening Date||Jan 18, 2021|
|IPO Closing Date||Jan 20, 2021|
|Issue Type||Book Built Issue IPO|
|Face Value||₹10 per equity share|
|IPO Price||₹25 to ₹26 per equity share|
|Market Lot||575 Shares|
|Min Order Quantity||575 Shares|
|Listing At||BSE, NSE|
|Issue Size||1,782,069,000 Eq Shares of ₹10 (aggregating up to ₹4,633.38 Cr)|
|Fresh Issue||1,188,046,000 Eq Shares of ₹10 (aggregating up to ₹[.] Cr)|
|Offer for Sale||594,023,000 Eq Shares of ₹10 (aggregating up to ₹[.] Cr)|
Important dates for IRFC IPO
|IPO Open Date||Jan 18, 2021|
|IPO Close Date||Jan 20, 2021|
|Basis of Allotment Date||Jan 25, 2021|
|Initiation of Refunds||Jan 27, 2021|
|Credit of Shares to Demat Account||Jan 28, 2021|
|IPO Listing Date||Jan 29, 2021|