This post on Railtel IPO attempts to bring out consolidated brokerage views , subscription information, Grey Market Premium (GMP) and anchor investor information where applicable. The information collated from various sources and reports in public domain can help investors to decide whether they should subscribe to Railtel IPO or not.
Related Posts : Railtel IPO Review
Railtel IPO: Grey Market Premium etc.
- 16-02-20 GMP Rs.12
- 1502-20 GMP Rs. 20-24
Railtel IPO: Anchor Investors
Railtel allotted 2.6 crore shares to Anchor investors at Rs 94 each. Some key Anchor Investors include HDFC Life, Nippon Life India, Goldman Sachs India among others.
Subscription: Railtel IPO ( x times)
|Day / X times||QIB||NII||Retail||EMP||Total|
|Tot Applications||~ 2379717|
|Appl wise Retail||12.16 x|
Consolidated Brokerage Views on Railtel IPO
Angel Broking :”Subscribe: The company’s margins & return ratios are better compared to other telecom players in India. There are no listed peers for the company. The issue has been priced at 21.4x PE on a FY20 trailing basis, which is quite reasonable by looking at the strong future growth rates of the company. We are positive on the long-term prospects of the industry as well as the company, we recommend subscribing to the RailTel IPO for long term as well as for listing gains.”
Capital Market : ” Score 45/100 ; On post issue equity, the EPS for FY2020 stood at Rs 5.6 and the annualized EPS for FY21 was Rs 2.8. The upper price of R 94, discounts the FY20 and annualized FY21 EPS by about 16.8 times and 33.6 times respectively. The price to book-value stands at 2.2 times. The company does not have any company that have mirror business profile.But the closest peer were Indus Towers which is into the business of owning passive telecom infrastructure and Tata Communications. Indus Towers, quotes at a PE of 20.3 times of its FY20 EPS. Tata Communications has reported a consolidated net loss for FY20 but its EV/EBITDA was about 13.8 times and in comparison that of Railtel was 5 times.”
Choice Broking: “There are no listed peers, having similar operating model. At the higher price band of Rs. 94 per share, the company’s share is valued at a FY20 P/E multiple of 15.8x (to its restated EPS of Rs. 5.9).Other railway infrastructure companies (IRCON, RITES and RVNL) are trading at an average P/E of 9.5x. However, considering the futuristic service & growth plans of the IR and RailTel’s ability to monetize its existing assets through subscription plans and co-sharing with private operators, we feel that fundamentals are positive for the company. Thus we assign a “SUBSCRIBE” rating for the issue.”
Geoejit: “At the upper price band of Rs.94, RailTel is available at a P/E of 21.4x on FY20 basis, which appears fully priced. Considering, increasing data usage, GoI’s digital India initiatives and further diversification plans of RailTel, we assign a Subscribe rating for the issue.
HEM Securities: “The company’s valuation looks fully priced. The edge which company holds over its peers in terms of financial performance makes this issue attractive to deploy the funds in. Hence, we recommend investors to subscribe the issue for short & long term.”
KR Choksey: “Accordingly, there are significant opportunities for companies, such as, RailTel pursuant to the Indian Railways ambitious plans. Given the Railway plan for modernization of its network, we expect RailTel to benefit from the opportunity going ahead and hence we give a “Subscribe” rating to the issue..”
Religare : “The financial performance of the company has been tepid with Revenue/ PAT CAGR of 7.5% and 2.6% over FY18-20. However, it has consistently paid a dividend since FY08. On the valuation front, the company is valued at a PE of 21.4x FY20 EPS. From a long-term perspective, investors can consider applying for the IPO.”
SMC: “Score 3/5 ; RailTel is ICT infrastructure providers to Indian Railways. The company is going to play a key role in digital transformation of Indian Railways. It has decent profitability with double-digit margins. It has managed to post revenue growth in the recent years and has no debt on its books. The management of the company is confident for slow and steady growth. Considering all these aspects, investors may consider investing in this issue with a long term perspective”
SP Tulsiyan Website: “At Rs. 94, company’s market cap will be Rs. 3,020 crore, leading to FY22E PE multiple of 19x, which is quite high for a PSU company, clocking low RoE of 10%, in absolute terms.Thus, pricing for Railtel appears steep in backdrop of historic growth rates, peer comparison and PSU control. Broadband industry has anyways witnessed sharp pricing pressure due to intense competition.”
MORE WILL BE ADDED AS THEY BECOME AVAILABLE
Standard disclaimer: Standard disclaimer: I am not a SEBI registered analyst /investment adviser and above information is collated from various online sources and is for educational purpose only. Please visit individual brokerage sites to read the actual reports. Please do not make your investment decisions based on this info as it is not complete and exhaustive. Please do your own due diligence as stock market investments have high degree of inherent risk.