Shares of RailTel Corporation of India were commanding a premium of Rs 15-17 per unit in the unlisted market ahead of their debut on exchanges on Friday, February 26, implying listing gains of 16-18 per cent over the issue price of Rs 94 per share.<\/p>\n
But a correction in the secondary market has dented the listing pop by nearly 50 per cent for RailTel shares as they were trading at Rs 109-112 apiece in the unlisted market from Rs 122 earlier, said grey market watcher Manan Doshi, co-founder of Unlistedarena.com.<\/p>\n
Keshav Lahoti, equity research analyst at Angel Broking too shares the view and sees a small premium listing for RailTel of around 15 per cent.<\/p>\n
Doshi, however, added that the sentiments around the issue are strong and a solid listing for Nureca on Thursday along with overall bullishness in the market could drive the grey market premium for RailTel higher.<\/p>\n
The initial public offer (IPO) that ran between February 16-18 had witnessed robust response from market participants and was subscribed 42 times. Most brokerages had a positive view on the company and ascribed a subscribe rating to the issue.<\/p>\n
Should you sell on listing?<\/p>\n
Analyst advised against booking profit and exiting the stock in case of a listing at a premium as they believe the company is a long-term bet with good business prospects.<\/p>\n
“Investors should wait and hold the stock as it is a good story. RailTel has good prospects and it will get business from Indian railways and private players in the future. I am positive on the company and investors can hold shares for the long-term,” said Lahoti.<\/p>\n
His brokerage Angel Broking had recommended Subscribe to the issue as it believes the company is going to play a key role in the digital transformation of Indian Railways and said the company’s margins and return ratios are better than other telecom players with a strong financial position.<\/p>\n
Astha Jain of Hem Securities recommends booking partial profit in case of listing premium of 12 per cent or above but holding the remaining stock for the long-term on the back of positive industry dynamics and the edge RailTel holds over peers.<\/p>\n
At the higher price band of Rs 94 per share, RailTel\u2019s share is valued at an 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 and growth plans of the IR and RailTel\u2019s ability to monetize its existing assets through subscription plans and co-sharing with private operators, we feel that fundamentals are positive for the company,” said Choice Broking in an IPO note.<\/p>\n
Some analysts in their IPO coverage reported had flagged risks such as dependence on the government projects and single-digit PAT CAGR of 7.5 per cent and 2.5 per cent, respectively from FY18 to FY20.<\/p>\n","protected":false},"excerpt":{"rendered":"
Shares of RailTel Corporation of India were commanding a premium of Rs 15-17 per unit in the unlisted market ahead of their debut on exchanges on Friday, February 26, implying listing gains of 16-18 per cent over the issue price of Rs 94 per share. But a correction in the secondary market has dented the listing pop by nearly 50 per cent for RailTel shares as they were trading at Rs 109-112 apiece in the unlisted market from Rs 122 earlier, said grey market watcher Manan Doshi, co-founder of Unlistedarena.com. Keshav Lahoti, equity research analyst at Angel Broking too shares […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[8],"tags":[],"class_list":["post-798083","post","type-post","status-publish","format-standard","hentry","category-telecom"],"acf":[],"_links":{"self":[{"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/posts\/798083","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/comments?post=798083"}],"version-history":[{"count":0,"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/posts\/798083\/revisions"}],"wp:attachment":[{"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/media?parent=798083"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/categories?post=798083"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/tags?post=798083"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}