RailTel IPO: Here’s All You Need To Know

RailTel Corporation of India, a Miniratna fully owned by the central government, aims to sell a 27.1% stake through a three-day initial public offering starting Tuesday, becoming the second state-run company under the Indian Railways to go public this year.

Peer

In 2019-20, RailTel reported the highest net profit margin and operating profit margin among key information and communication technology providers. Its return on capital employed was also the most among peers.

Risks

• Regulatory risks: changes in laws, licence terms, and government policies can potentially affect the business.
• High dependency on PSU customers: any change in investment plans of such PSUs can affect the company’s ability to participate in competitive bidding or negotiations for future projects.
• Technological changes: if the company failed to keep pace with changing technology, it may lose customers and subscribers.
• Internet security concerns: computer viruses, piracy, cyberattacks, break-ins, and other inappropriate or unauthorised uses of the company’s network may impact the operations.