The central government has started ground work for IPOs of RailTel and Indian Railway Finance Corporation (IRFC), according to different media reports. The twin offers are likely to fetch around INR1,500 crore (INR15 billion) to the government with IRFC IPO contributing the majority.
RailTel Corporation India – one of the largest telecom infrastructure providers in the country – plans to launch its INR500 crore IPO in the second-half of FY2021.
“We plan to bring the IPO by the third quarter at the earliest. Necessary approvals are being obtained by the company,” an unnamed company official was quoted as saying by Cogencis news agency.
The company originally planned to launch its maiden public offer in the first-half of FY2021 but its efforts were derailed by outbreak of COVID-19 pandemic.
Despite the expectations and positive statements, it remains unlikely for RailTel to get listed anytime soon. The company is yet to file draft prospectus with market regulator SEBI.
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IRFC IPO May be First to Float
On the other hand, IRFC appears to be better prepared for stock market listing. The company has already filed its draft papers and received SEBI approval earlier this year. IRFC IPO size is expected to be around INR1,000 crore.
“We are targeting the end December or January quarter for the IPO. Hoping that the economic conditions would improve by then and there would be appetite for the issue,” a finance ministry official was quoted by Telegraph India.
IRFC offers project financing and rolling stock leasing to railways. Nearly 79% of railways’ wagons, coaches and about 85% of engines are financed by IRFC which is entitled to a margin of 40 basis points over the weighted average cost of borrowing.
IRFC is last of the five companies union cabinet identified for stock market listing in April 2017. The other four companies – RVNL, IRCON International, IRCTC and RiTES Ltd – have already found their way to stock markets in successful listings. According to the information furnished on its website, the company posted a 24.2% jump in topline to INR13,823.4 crore in FY2020. The pandemic had no impact on its profits as comprehensive earnings surged 62.3% to INR3,658.7 crore during the same timeframe.