The government's Rs 820 crore RailTel Corporation of India’s initial public offering (IPO) has been subscribed nearly seven-times as of the second day (February 17).

“RailTel is the largest neutral infrastructure provider for telecom services and as the consumption is rising for digital and telecom, we believe the rising consumption will help them grow in the forthcoming quarters,” said Omkar Tanksale of Axis Securities in an interview with CNBC-TV18.

“They have a continuous dividend paying history for the last few years with a dividend pay out ratio of 20 percent. So it is a decent business with decent financials, looks attractive for subscription,” he said.

On the pricing front, he said, “We can expect some listing gains. However, the main gain that they are going to get from the business perspective with 12 percent compound annual growth rate (CAGR) for next 2-years. So we can expect around Rs 120-125 target price.”

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(Edited by : Ajay Vaishnav)