RailTel IPO allotment status: Here’s how you can check it

NEW DELHI: The initial public offer (IPO) of RailTel Corporation, which concluded last Thursday, saw the highest-ever retail participation among the six initial public offerings from the Railways that have hit the market so far. At 16.78 times the quota limit, RailTel IPO received more retail bids than RITES’ 14.74 times and IRCTC’s 14.95 times.

However, the total subscription level for the issue at 42.42 times was far less than 111.95 times for IRCTC and 67.24 times for Rites. Others such as IRFC, RVNL, Ircon International had witnessed up to 10 times subscriptions to their offers.

RailTel received 23,79,717 applications for shares, the second best for a Railway IPO since IRFC’s 25,51,325.

The share allotment for the issue is likely to be finalised by Tuesday. Initiation of refunds would be done by Wednesday while credit of equity shares to investors should take place by Thursday. The scrip may be listed on the bourse on Friday.

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.

On KFintech Private's web portal, one needs to select the IPO whose data will be populated only when the basis of allotment is declared. One also needs to provide a PAN ID or application ID or client ID and DPID (depository participant identification) to fetch the information.

The registrar is responsible for complying with the timelines for updating the electronic credit of shares to successful applicants, dispatch, and uploading of refunds, and attending to all investor-related queries after the issue is completed.

Another way of checking the IPO allotment status is via stock exchanges. To be able to do so on the Bombay Stock Exchange (BSE), one can click here.

Listing pop likely
Analysts said the stock could see some listing pop, though some analysts do not look at it as a long-term play.

“It is attractively valued. It might get a listing pop, as most IPOs are seeing. But there is nothing really to write home about. Most of the Railway service providers are very low growth companies. They might have some monopoly in the businesses they are operating, but there is no great long-term story. When we look at PSUs such as Bharat Electronics, they could have some stories because they are getting very large-sized orders and have some competence. But it is not true for the rest of the PSU space,” said Sandip Sabharwal, asksandipsabharwal.com.

The grey market premium for the unlisted shares also signalled a possible listing pop.

During FY18-20, RailTel’s revenue grew at a compounded annual growth rate of 7.5 per cent at Rs 1,128 crore in FY20. Over the same period, Ebitda grew at a CAGR of 12.4 per cent at Rs 334 crore in FY20. Net profit rose 2.6 per cent CAGR during the period to Rs 141 cr in FY20. Operating margin was above 28 per cent while the dividend payout ratio was 46-49 per cent during the period.

“The company has delivered single-digit revenue and PAT from FY18 to FY20. The business has high dependence on government entities and concentration risk given that 23.8 per cent of its revenues comes from top three customers. It is present in a highly regulated industry, which is another cause of concern,” said Nirali Shah, Head of Equity Research, Samco Securities. The analyst had a ‘subscribe’ rating on the IPO only for listing gains.