F.No.

3/5/2018- DIPAM-V
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF INVESTMENT AND PUBLIC ASSET MANAGEMENT

REQUEST FOR PROPOSAL TO ENGAGE BOOK RUNNING LEAD MANAGERS

FOR LISTING AND DISINVESTMENT IN RAILTEL CORPORATION OUT OF
GOVERNMENT OF INDIA SHAREHOLDING OF 100% THROUGH “INITIAL
PUBLIC OFFERING” IN THE DOMESTIC MARKET – REQUEST FOR
PROPOSALS.

1. Introduction

1.1 MINISTRY OF RAILWAYS owns 100% shares of the RailTel Corporation of India
Ltd (RailTel) with nine nominee shareholders besides President of India. The Company
was incorporated in 2000 as a Public Limited Company with the objective of creating
nationwide Broadband Telecom and Multimedia Network in all parts of the country, to
facilitate Railways in ‘expeditious’ modernizing of their operation and safety systems and
network by providing state of the art communication infrastructure and to generate revenue
through commercial exploitation of its telecom network. The company is managed by
Board of Directors which presently comprising of four Functional Directors, two
Government Nominee Directors and one Independent Director.

1.2 The authorised share capital of the company is Rs. 1000 crore as on date. The
initial paid-up share capital of Rs.15 crore was infused by the Ministry of Railways towards
seed capital. Besides, the Optical Fibre Cable related assets (microwave based) were
subsequently transferred on “as is where is basis” to exploit the surplus capacities available
therein. The total value of such assets so far transferred amounted to Rs. 306 crore
(Appox.) against which the equity capital has been allotted to the Ministry. Thus, presently,
the entire paid-up shares capital of Rs.320.93 crore which is fully subscribed by Ministry of
Railways, Government of India. The face value of each Equity share is Rs 10.

1.3 Profit After Tax for the Fiscal 2017-18 was Rs 156 crore for RailTel. As on March
31, 2018, it has a Net worth of Rs. 1249 crore.

1.4 The listing would entail disinvestment of a portion of paid-up equity of RailTel through
a prospectus based “Initial Public Offer” (IPO) in the domestic market as per SEBI Rules
and Regulations. The percentage of paid-up equity to be divested will be determined based
on the post issue capital of the company calculated in consonance with the clause 19 (2)

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of the Securities Contracts (Regulation) Rules (SCRR). A part of the public offering will be
reserved for employees of the company. The eligible employees and retail investors will be
offered shares at a discount (to be decided later) on the Issue price.

2. Government decision

2.1 Proposals are invited as per Guidelines (Para 5) by 15:00 hours (IST) on 11th
June, 2019 from reputed Category I Merchant Bankers registered with SEBI having a valid
certificate; either singly or as a consortium, with experience and expertise in public offerings
in capital market; to act as Book Running Lead Managers and to assist and advise the
Government in the process. The Certificate of Registration with SEBI should remain valid
till the completion of all activities relating to “Initial Public Offer”.

3. Responsibilities of the Book Running-Lead Managers (BRLMs)

3.1 The Book Running Lead Managers will be required, inter alia, to undertake
tasks related to all aspects of the “Initial Public Offering” including but not restricted to,
as mentioned below: -

(i) Structure the “Initial Public Offer” in conformity with the prevailing
framework and Guidelines/ Regulations of SEBI, SEBI (ICDR) Regulations
the Stock Exchanges and Securities Contract (Regulation) Act, 1956,
Securities Contract (Regulation) Rules 1957, SEBI (Listing Obligations and
Disclosure Requirements) Regulation, 2009, as amended and Companies
Act, 2013 and the rules made under above statutes.
(ii) Undertake due diligence activities and prepare the DRHP/RHP/Prospectus
and complete all stipulated requirements & formalities of
regulatory/statutory authorities.
(iii) Undertake filing of the DRHP/RHP/Prospectus with SEBI/ Stock
Exchanges/ ROC.
(iv) Advise on the regulatory norms and assist in securing approval and
exemptions, wherever necessary, from various regulatory agencies such
as SEBI, Stock Exchanges, RBI, FIPB etc.

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(v) Conduct pre-market survey, road shows to generate interest amongst
prospective investors. Arrange meetings with the key investors, facilitate
communication about the growth potential of the Company and articulate
the key marketing themes & positioning of the Company.

(vi) Undertake market research, assist in the pricing of the Issue, allocation of
shares and provide after sale support, etc.

(vii) Perform all other responsibilities connected with the “Initial Public Offer”.

(viii) Underwrite the “Initial Public Offer”.

(ix) Assist in selection of intermediaries to be appointed by Government and

coordinate the work of all intermediaries.

(x) Prepare and approve the statutory advertisements for publication. The cost
of the preparation will be borne by the BRLMs and the cost of publication
will be borne by the Government.
(xi) Organize road shows both domestic and international. All expenses in this
regard will be borne by the BRLMs except the tour expenses of Government
and RailTel officials.

(xii) Advise the Government of India on the timing and the modalities of the
“Initial Public Offer”.

(xiii) Ensure optimum return to the Government.

(xiv) Undertake the task of printing and distribution of stationery required for the
“Initial Public Offer” as illustrated in Annexure-I. The BRLMs will ensure
that the stationery is printed in adequate quantity and delivered to the
Centres/Parties well in advance. The appointed BRLMs will print a minimum
of 5 lakh application forms for all the categories. However, any shortfall
in the number of applications printed will be viewed seriously by
government and dealt with very strictly. All expenses in this respect will be
borne by the BRLMs.
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(xv) The appointed BRLMs will also make the following payments after obtaining
negotiated quotes where applicable and would be reimbursed by the company
or GoI or both as per actuals against an invoice:

i. Filing fee to SEBI;

ii. NSE/BSE charges for use of software for the book building;

iii. Payments required to be made to Depository or the Depository

Participants for transfer of shares to the beneficiaries’ account.
iv. Payment required to be made to stock exchange for initial
processing, filing and listing of shares.

(xvi) Shall enter into the requisite agreements i.e Offer Agreement, Underwriting
Agreement, Syndicate Agreement, Agreement with Registrar Advt. agency
agreement and Escrow Agreement based on the model agreements as
available on the website www.dipam.gov.in of the Department of
Investment and Public Asset Management.

(xvii) Ensure completion of all post issue related activities as laid down in the
SEBI Regulations.

(xviii) Render such other assistance as may be required in connection with the
IPO.

NOTE:

(a) The appointment of Bankers to the Issue, Registrar to the Issue, Legal
Advisers–Domestic and International, Auditors and Advertising Agency/Public
Relation Agency will be made by the Government or the company or both
which will also bear the expenditure involved on account of these
intermediaries.

(b) The expenses related to the tour programme of only Government and RailTel
officials will be borne by the Government.

(c) In case the Government decides to defer the Public Offering after the
Application Forms have been printed, the Government would reimburse the
actual cost of printing of Application Forms only and not the distribution cost.
Further, in the event the filing fee is required to be paid again due to deferment

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 of the offering, then Government will reimburse the initial filing fee paid by the
BRLMs.

3.2 The Government will select and appoint up to 3 (three) Merchant Bankers with
requisite experience in Public Offerings, who together will form a team and would be
called Book Running Lead Managers. The BRLMs, in consultation with the
Government, will form a syndicate as required under the SEBI Guidelines/Regulations.
The Government will have the option of appointing additional syndicate member(s), if
considered necessary.

4 Accountability

In order to ensure best returns to the Government the selected BRLMs will be required
to comply with the following conditions emerging from the responsibilities listed in
clause 3 above:

4.1) Within 14 (Fourteen days) from the date of issue of the appointment letter each
of the selected bankers will submit to the concerned DIPAM officer -

a) details of inter-se allocation of responsibilities (“Inter-Se”) in relation to the IPO,

amongst the merchant bankers and/ or their affiliates. The Inter-Se submitted by
the selected bankers shall be evaluated by DIPAM and they may be required to
make certain alterations and resubmit the Inter-Se. The Revised Inter-Se should
be submitted to DIPAM within 2 days of finalization of the revisions in the Inter-
Se with DIPAM. The revised Inter-Se, upon formal acceptance by DIPAM, shall
become final and binding Inter-Se of Action which the merchant banker would be
required to implement;

b) a “Plan of Action” on each responsibility and tasks to be undertaken by the

selected bankers as a merchant banker in connection with the captioned IPO
including but not limited to all the tasks as specified hereunder. The Plan of Action
submitted by the selected bankers shall be evaluated by DIPAM and they may be
required to make certain alterations and resubmit the Plan. The Revised Plan of
Action should be submitted to DIPAM within 2 days of finalization of the revisions
in the Plan of Action with DIPAM. The revised Plan of Action, upon formal
acceptance by DIPAM, shall become final and binding Plan of Action which the
merchant banker would be required to implement.

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4.2) Each of the selected bankers will submit to the concerned DIPAM officer separate list
of investors of both domestic and international investors, (indicating name and
address) to be approached by each of the selected bankers respectively for the IPO
at least 30 (thirty) days prior to the roadshow;

4.3) Each of the selected bankers will submit to the concerned DIPAM officer a detailed
strategy for reaching out to the retail investors so as to create awareness about retail
participation in the IPO at least 14 (fourteen) days prior to filing of RHP.

4.4) The selected bankers will be required to provide regular updates as decided by
DIPAM, regarding the progress made on the final Plan of Action (as referred above)
and the tasks undertaken (including follow-ups done) etc during the preceding
period and course of action for the period after the day this update is being given.

4.5) The selected bankers will be required to submit post the domestic and international
investor meetings book building of the investors with likely volume and likely price
based on latest interaction and response of the fund managers.

4.6) The selected bankers will be required to advise DIPAM on the proper and optimum
timing and best floor price for the IPO (apart from other tasks in relation to IPO).

4.7) Further, after the closure of IPO, within 10 days the selected bankers will be
required to submit a self-appraisal on the Final Plan of Action that DIPAM had
accepted. DIPAM shall also evaluate the bankers’ performance based on the Final
Plan of Action and self-appraisal sent by the selected bankers, which shall be taken
into consideration by DIPAM for future assignments

5. Eligibility

5.1 The cumulative size of domestic equity issues (Initial Public Offering or Further
Public Offering) handled by the bidders during the period from 1st April, 2016 to 31st
March, 2019 should be at least Rs 1500 crores
Or

The cumulative size of OFSs handled by the bidders during the period 1st April, 2016
to 31st March, 2019 should be at least Rs 1500 crores and the cumulative size of
IPOs handled by the bidder during the period from 1st April, 2016 to 31st March, 2019
should be at least Rs 500 crores.
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5.2 The Government has prescribed guidelines for qualifications for Advisors for
disinvestment process, enclosed at Annexure-III. The interested Bidders fulfiling
eligibility criteria mentioned in paragraph 5.1 above are advised to go through the
guidelines and if eligible, furnish the following certificate as a part of the Proposal,

“We certify that there has been no conviction by a Court of Law or indictment/adverse
order by a regulatory authority for a grave offence against us or any of our sister
concern(s). It is further certified that there is no investigation pending against us or our
sister concern(s) or the CEO, Directors/Managers/ Employees of our concern or of our
sister concern(s). It is certified that no conflict of interest as defined in O.M. No.
5/3/2011-Policy dated 8th June, 2011 exists as on date and if in future such a conflict
of interest arises, we will intimate the same to the Government of India/ Company.

Further, we certify that as on the date we are not advising or acting on behalf of or
associated with any other person or entity (including any company, partnership,

proprietary concern or individual or an HUF or association of persons or body of

individuals) which is engaged in the same line of business as that of the Company
(being disinvested), in respect of any transaction of same nature as the transaction for
which the Government and/or the Company (being disinvested) is proposing to select
the Adviser, except for the list of the mandates, duly signed by us, in the same line of
business and for the same type of transaction as enclosed.

Further, we certify and undertake that for a period commencing from the date of our
appointment (if so appointed) as the Adviser till the completion of the transaction, we
shall keep the Government/CPSE informed of any mandate/contracts entered into, to
advise or act on behalf of or associate ourselves with, any other person or entity
(including any company, partnership, proprietary concern or individual or an HUF or
association of persons or body of individuals) which is engaged in the same line of
business as that of the Company being disinvested , in respect of any transaction of
same nature as the transaction in respect of which we have been appointed as the
Adviser.”
(The certificate should be signed by the authorized signatory of the Bidder.)

Note: The content of the certificate must not be changed. Clarification, if

any, may be provided separately.

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6. Submission of Proposal:

6.1 Proposals have to be submitted as per the following directions:

(i) Envelope 1 (unsealed) containing the following:

(a) Non-refundable fee of Rs one lakh by way of a demand draft drawn in

favor of 'Pay and Accounts Officer, Ministry of Finance, Department of
Investment and Public Asset Management,, New Delhi' payable at Delhi
(Enclosure-1);

(b) Certificate, duly signed by the authorized signatory of the bidder as per
para 5.2 (Enclosure-2);

(c) Certificate in format at Annexure-IV (Enclosure 3);

(d) Authority letter authorizing the person of the bidder to sign the proposal
and other documents (Enclosure 4);

(e) Copy of the valid certificate of Category I Merchant Banker issued by

SEBI (Enclosure 5); and

(f) Confirmation letter that you are agreeable to sign the agreements on the
basis of model agreements in the format as placed on the website
www.dipam.gov.in of the Department of Investment and Public Asset
Management, (Enclosure 6).

(ii) Envelope 2 (Sealed) containing the technical bid as per format in para 6.4, to
be opened in the presence of the bidders on 11th June, 2019 at 15:30 hours
in the Committee Room No. 515, Department of Investment and Public
Asset Management, Block 14, CGO Complex, New Delhi. The bidders are
also required to send technical bid through soft copy to Department of
Investment & Public Asset Management after the opening of the bids.

(iii) Envelope 3 (Sealed) containing the Financial Bid, to be opened only after the
presentations and of only those parties who qualify in the technical bid. The
bids will be opened in the presence of the bidders (who are technically
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 qualified based on presentations) immediately after the presentations. Bids
with conditionality will be summarily rejected.

6.2 The proposal (all three envelopes) can be submitted latest by 3:00 pm on
11th June, 2019, to Shri Abhishek Sinha, Assistant Section Officer, DIPAM, Room
No. 212, 2nd Floor, Block No.11, CGO Complex, Lodhi Road, New Delhi-110003 in
hard copies in original, duly signed by the authorized officer of the Merchant Banker.
No proposal will be entertained after the appointed time and date. The Government
will not be responsible for any postal/courier delay. The proposals received after the
appointed time and date will be summarily rejected.

6.3 The Government reserves the sole right to accept or reject any or all Proposals
thus received without assigning any reasons thereof.

6.4 PRE-BID MEETING:

The interested parties are required to send in their queries by email to email-id:
[email protected] by 31st May, 2019. A pre bid meeting will be held on 4th June, 2019 at
3:00 P.M in the Conference Hall of Department of Investment and Public Asset
Management (DIPAM) Room number 515, Block 14, CGO Complex, New Delhi.
Interested parties may attend the pre-bid meeting, if they so desire.

6.5 Proposal Format:

The Proposals are to be submitted in detail as indicated in the following Sections. The
weightage for evaluation of the Merchant Bankers in respect of each criterion has been
indicated against each Section.

Section (A):

Experience and Capabilities in handling similar transactions as Advisers/Global

Coordinators - (Weightage for evaluation 15/100) (from 01.04.2016 to 31.03.2019)

(i) Profile of the organization with full particulars of the constitution, ownership and
business activities of the prospective Book Running Lead Manager (Bidder). In
case of consortium bids, the particulars of the coordinating firm having the
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 principal responsibility for the mandate (Consortium Leader) as well as those of
other partners may be furnished along with letters of acceptance from each
partner. The responsibility of the consortium bidders shall be ‘joint’ and ‘several’.

Note: 1. The consortium partner(S) should be a Category-I Merchant Banker

holding valid certificate issued by SEBI and should furnish the
Certificate as per clause 5.2 as part of the proposal.

2. Consortium will be treated as one party and in case of selection,

only consortium leader's name will appear in the documents like
DRHP/RHP/Prospectus.

3. The partners of one consortium are precluded from participating in

the bid, as a partner to another consortium.

(ii) Unabridged Annual Reports or audited financial accounts for the last three years
of the firm submitting the Proposal and of each consortium partner, if applicable.

(iii) Details of all pending litigation and contingent liabilities, if any should be indicated.
Details of past conviction and pending litigation against sponsors/partners,
Directors etc., if any, and areas of possible conflicts of interest may also be
indicated.

Note: In case of consortia, similar details of each proposed partner will be

required.

(iv) Details of Domestic and International Equity Offerings managed as Book Running
Lead Managers, in respect of issue size mentioned in eligibility criteria in para
5.1, to be furnished in the format given in Annexure-II.

Section (B):

Number of issues handled as a left lead (Weightage for evaluation 15/100)

(from 01.04.2016 to 31.03.2019)

(i) Furnish details of Domestic and International Equity Offerings managed as a left
lead, in the format given in Annexure II.

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Section (C):

Domestic equity sales and distribution capacity – (Weightage for evaluation 5/100)
(i) Demonstrable capability of selling Indian Issues in particular, Asian equity and global
equity; along with distribution network and broking capability may be furnished.

(ii) Trading rank among broking houses in India.

Section (D):

Past Performance with Department of Investment and Public Asset Management

(DIPAM)(Earlier DoD) (from 01.04.2016) – (Weightage for evaluation 10/100)

(i) The Merchant Banker would be evaluated on the number of applications and the
issue amount procured by them for various issues in which DIPAM also divested
Government of India shareholding.
(ii) The quality of deal team and its ability to handle the issues that had arisen during
the transactions.
(iii) Understanding of regulatory framework and the time frame and quality of
response to the queries of the Department/Company.

Section (E):

Sector Expertise, Experience and Understanding of RailTel Corporation- (Weightage

for evaluation 10/100)
(i) Indicate work done in the areas of telecommunications and consultancy services
in said sector - like studies or research undertaken.

(ii) Exhibit strength/expertise in the areas of telecommunications and in consultancy

services in said sector, including RailTel, if any.

(ii) The Public Offerings handled during the period from 1.04.2016 to 31.03.2019 in
the areas of telecommunications.

(iv) Research Reports done on companies operating in areas of telecommunications

(v) SWOT analysis of RailTel.

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Section (F):

Deal Team Qualification & Manpower Commitment to the Deal - (Weightage for
evaluation 10/100)

Details of core team that will be handling the proposed issue, their status in the
organization, their background, qualification, experience and present addresses,
telephone numbers – office, residence, mobile, e-mail etc. – hands-on experience
should be furnished. Separately, similar details in respect of the supervisory team
may be indicated.
Details of other professionals who would provide back-up support may also be
indicated separately.
An undertaking is also to be given that if during the process, any of the core team
members is not available due to resignation etc. another person of the same
qualification and experience would be made available with concurrence of the
Government.

Section (G):

Marketing strategy & Post Issue Market Support - (Weightage for evaluation 10/100)

(i) Optimal syndicate structure suggested to maximize quality and quantity of

demand.
(ii) Proposal on syndicate incentivisation.
(iii) Strategy for pre-marketing.
(iv) Proposed Road Show venues and reasons for suggesting the same and the level
of BRLM representatives who will travel on the domestic and international road
shows.
(v) Demand analysis and aspects influencing demand.
(vi) Strategy for marketing shares (including broker networks).
(vii) Strategy for identification of target investor groups.
(viii) Commitment(s) which may act either as a constraint, or as a conflicting interest,
to your involvement in the proposed “Initial Public Offer”.
(ix) Strength in lending after market support, with specific reference to Indian issues
managed in the past.
(x) Identification of key selling points for marketing the Offering.
(xi) Details of the valuation methodology to be followed in determining the price of
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 the “Initial Public Offer”. Underwriting capabilities including details of capital base
of the Investment Bank available to support such underwriting, record of past
underwriting commitments and experience. Details of the underwriting
commitments (including hard underwriting) which could not be met.
(xii) Indicate realistic time schedule for launching the proposed “Initial Public Offer”
with breakup of all activities to be undertaken by various agencies involved in the
process.

Section (H):

Local presence and commitment to India and strength in drawing Retail Investor
participation - (weightage for evaluation 10/100)
A brief note evidencing the Bidders presence in India in both qualitative and
quantifiable terms with specific reference to research teams and details of
available infrastructure may be furnished. The details shall include manpower
deployed in the investment banking (equity segment), offices in India and other
relevant information. The distribution network strength to elicit maximum retail
participation should be indicated.

Section (I):

Global Presence and Distribution Capabilities - (Weightage for evaluation 10/100)

(i) Indicate global network and distribution strength.

(ii) The funds mobilized from international investors for Equity Public Offerings in
India during the period from 01.04.2016 to 31.03.2019

(iii) The understanding and relationship with international institutional investors.

Section (J):

Research Capability - (Weightage for evaluation 5/100)

(i) Research strength within the country and globally. Please furnish details in format
given in Annexure – V.
(ii) Number of research reports published in the sector the CPSE belongs to
(iii) Background of research team including rankings, if any.

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NOTE (refer to Section D):

The Merchant Bankers who have not executed any transaction in the past with
the Department of Investment and Public Asset Management (earlier DoD) would
be evaluated on all parameters except Section B above and would be awarded
marks out of 90 instead of 100 and then proportionately increased to a scale of
100 so that they are neither at an advantage nor at a disadvantage.

6.6 The complete information sought above with any additional information
considered necessary by the Bidder as a part of the Proposal, should be sent
(maximum of 10 pages in font size 12) to the officer mentioned in para 6.2.

7. Payment of Selling Commission

7.1 The Government will bear the expenses relating to the payment of brokerage to
the brokers etc. to elicit wider participation of retail investors. The brokerage will be
0.35% on allotment to Retail investors; 0.15% on allotment to non-institutional
investors and 0.25% on allotment to eligible employees out of quota reserved for them.
In the first instance the brokerage will be paid by the appointed BRLMs and on
successful completion of the transaction the brokerage would be reimbursed on
production of documentary proof of actual disbursement within the stipulated period of
one month from the date of finalization of the basis of allotment.

8. Procedure for Selection of the Book Running-Lead Managers (BRLMs)

8.1 Qualified interested Bidders would be required to make a presentation of their

credentials, in the format prescribed in paragraph 6.4 above, for the proposed
transaction, before an Inter-Ministerial Group (IMG) at New Delhi in the Committee
Room of Department of Disinvestment, Room No.515, Block No.14, CGO
Complex, New Delhi-110003. The time/date of the presentation will be posted on
the website of Department of Disinvestment ‘www.dipam.gov.in’ in due course.
Only the Team Leader of the Core Team shall make the presentation.
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8.2 The IMG would evaluate the Bidders on the criteria mentioned in paragraph
6.4 above based on their presentation and Proposals received and shortlist them for
the purpose of opening of their Financial Bids. Only the parties scoring predetermined
marks/score out of 100, which will be announced before presentation, will be
technically short listed.

8.3 After the short listing of Bidders based on their presentations, IMG would open
the Financial Bids of only short listed Bidders. The short listed bidders, if they so
desire, may remain present at the time of opening of the financial bids. The qualifying
marks and the marks scored by the short listed bidders will be announced before
opening of the financial bids. The date and time of opening of the financial bids would
be announced at the time of the presentations.

8.4 The marks scored by the short listed bidders in the technical evaluation will then
be given a weightage of 70. Similarly, the financial bids of the short listed bidders will
be given a weightage of 30. The score on the basis of Quality and Cost based system
(QCBS) of technical and financial bids will determine the H1, H2, H3 and so on.

8.5 The party scoring the highest points/marks (H1) based on the above principles
would be appointed for the transaction. The other technically qualified bidders ranked
as H2, H3 and so on in that order would be asked to accept the rules mentioned in
para 8.7 regarding the sharing of fee and the parties who so accept the fees will also
be appointed till the required number of BRLMs are filled up. Government may
consider selecting lesser number of Bidders for appointment as BRLMs.

8.6 The BRLM, having the highest technical bid score amongst the appointed
BRLMs would be appointed left lead for the transaction. In case of a tie between the
BRLMs, the BRLM with more experience of handling transactions as a left lead, from
01.04.2016 to 31.03.2019 will be appointed the left lead.

8.7 10% of the discovered fee (fee quoted by H1) would be paid to left lead.
60% of the discovered fee would be shared equally amongst the BRLMs (including left
lead). 30% of the discovered fee would be shared among the bankers, in proportion
to the overall final bid amount (excluding rejection and withdrawal cases) brought in
by each banker (including QIB, NII and retail investors but excluding employees of the
company). The method for calculating the bid amounts brought in by each banker as
follows:

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 • The bid amount brought in by each banker from Non-Institutional Investors
(NIIs) and Retail Investors portion will be calculated on the basis of data made
available by the RTA (to be certified by all the BRLMs) for allotment of shares.

• The bid amounts brought in by each banker from QIBs will be calculated in
following manner:

The BRLMs will submit a list of QIB investors to be contacted by each BRLM
before the filing of RHP to DIPAM. One investor can be allocated to more than
one BRLM.

In case of a QIB investor which was already allocated to BRLM/BRLMs:

Credit will be given to the respective BRLM/BRLMs who was/were allocated

the investor under consideration. In case an investor was allocated to more
than one BRLM, the credit will be shared equally among all the responsible
BRLMs.

In case of a QIB investor that was not allocated to any BRLM:

a. Credit will be given to the BRLM who organized the meeting/call with the
investor.

b. For an unallocated investor with whom the BRLMs had not arranged a
meeting/call, credit can be given to BRLM on the basis of a written confirmation
(including mail/Bloomberg confirmation/broker code from application form)
provided by the authorized representative of the investor to the BRLM.

c. If an unallocated investor does not fall into (a) or (b) mentioned above, credit
for such investors will be split equally amongst the BRLMs.

8.8 The selected Bidders will work as a team and be called Book Running Lead
Managers.

8.9 For the release of fees all the BRLMs should jointly certify the list of investors
brought in by them. DIPAM will go by the certification jointly given by the BRLMs for
payment of the fees.

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9. Requirements for Financial Bids

9.1 The bidder is required to quote a transaction fee as a percentage of the

disinvestment proceeds i.e. the amount received in government account. The
fee quoted should be limited to 4 (four) decimal points. The fee quoted by the bidder
should include all the applicable taxes, cess, duties etc. The fee will be payable in
Indian rupees after successful completion of each of the transaction.

Note: All merchant bankers are required to furnish a break-up of expenses on items
like printing of stationery; advertisement agency/public relation agency for preparation
of statutory advertisements and road shows; fee payable to SEBI as filing fee; payment
to NSE and BSE for use of software for the book building and payment required to be
made to depositories or depository participants for transfer of shares; any additional
selling commission/brokerage that the Merchant Bankers may pay in addition to selling
commission/brokerage that Government will pay. These details are to be provided
along with the financial bid on a separate sheet being the annexure to the financial bid.

9.2 DIPAM reserves the right to deduct up to 2% from the overall fee to be given
to a BRLM at the end of transaction in case of any shortcomings in the services
provided by BRLMs during the course of the issue e.g not setting up meetings with
sufficient number of investors, shortfall in number of application forms to be printed,
delay in filing of documents on part of BRLMs etc. Decision of DIPAM will be final in
this regard.

9.3 The fee quoted should be unconditional and inclusive of the expenditure to be
incurred on the intermediaries and the work mentioned in paragraph 3.1 above.

9.4 The Bidders may quote a drop dead fee, if any, payable by Government in case
of calling off of the transaction by the Government after initiation of the process by the
Bidder. The lowest drop dead fee quoted by any of the finally selected Bidders would
be treated as drop dead fee payable by Government and be shared equally by all
the Bidders. Drop dead fee will not be a criterion in determining the H1 Bidder.

9.5 The Bidders will be liable to pay taxes applicable as per law.

10. Termination of the assignment

10.1 In case it is found during the course of the transaction or at any time before
award of the assignment or after its execution and during the period of subsistence or

Page 17 of 26
after the period thereof, that one or more of the terms and conditions laid down in this
request for proposal has not been met by the Bidder, or the Bidder has made material
misrepresentation or has given any materially incorrect or false information, the Bidder
shall be disqualified forthwith if not yet appointed as the Merchant Banker/ Selling
Broker. Also if the Selected Bidder has already been appointed as the Merchant
Banker/ Selling Broker, as the case may be, the same shall, notwithstanding anything
to the contrary contained in this RFP, be liable to be terminated, by a communication
in writing by the DIPAM to the Selected Bidder without the DIPAM being liable in any
manner whatsoever to the Selected Bidder. This action will be without prejudice to any
other right or remedy that may be available to the DIPAM under the Bidding
Documents, or otherwise. However, before terminating the assignment, a show cause
notice stating why its appointment should not be terminated would be issued giving it
an opportunity to explain its position.
10.2 Further, during the course of appointment of the selected bankers for the
captioned IPO, at any point of time if DIPAM (in its sole discretion) thinks that the
selected bankers are not performing up to the expectations of DIPAM, then DIPAM
shall have the right to substitute the selected bankers with another Merchant Banker,
as DIPAM may deem fit, without assigning any reasons.

11. Non disclosure Agreement

11.1 Selected BRLMs would be required to sign the non-disclosure agreement with
the Company. Failure to sign the same would make their appointment null and void.

12. For any further clarification, you may kindly contact, Shri Sidhil Sasi, Director,
DIPAM, Ministry of Finance, Room No. 404, 4th Floor, Block No.11, CGO Complex,
New Delhi -110003, Tel. 011- 24368345, e-mail : - [email protected].

*******

Page 18 of 26
 Annexure - I

INDICATIVE LIST OF STATIONERY FOR THE “INITIAL PUBLIC OFFER” IN

RESPECT OF RailTel

Sr. Description

1 DRAFT RED HERRING PROSPECTUS

2 RED HERRING PROSPECTUS (ORDINARY & SPECIAL)

3 PROSPECTUS

4 BID CUM APPLICATION FORM with Memorandum in Book form

(RESIDENT/NRI/EMPLOYEES)

5 POSTERS/BANNERS

6 CAN, REFUND STATIONERY ETC.

Page 19 of 26
 Annexure - II

DETAILS OF DOMESTIC/INTERNATIONAL EQUITY OFFERINGS

01.04.2016- 01.04.2017- 01.04.2018-

Parameters 31.03.2017 31.03.2018 31.03.2019
Mandate Value Mandate Value Mandate Value
(` Cr) (` Cr) (` Cr)
DOMESTIC 1 1 1
EQUITY 2 2 2
PUBLIC 3 3 3
OFFERINGS

TOTAL
INTERNATIO 1 1 1
NAL EQUITY 2 2 2
PUBLIC 3 3 3
OFFERINGS
TOTAL
PUBLIC 1 1 1
OFFERINGS 2 2 2
PULLED 3 3 3
OUT/WITHD
RAWN PRE
OR POST
ROADSHOW
TOTAL

Note: 1. Please indicate whether you were engaged by Government of India for any
Equity Public Offering, other than those mentioned above and if so, furnish details.

Page 20 of 26
 Annexure - III
No. 5/3/2011-Policy
Government of India
Ministry of Finance
Department of Disinvestment

Block 14, CGO Complex,

Lodhi Road, New Delhi- 110003

Dated the 8th June, 2011

OFFICE MEMORANDUM

Subject: Guidelines for qualification of Advisers for disinvestment process.

In order to inspire public confidence in the selection of Advisers through

competitive bidding, the Government had framed comprehensive and transparent
guidelines defining the criteria for their selection. In addition to using a set of criteria
like sector experience, knowledge, commitment etc., additional criteria for
qualification/disqualification of the parties to act as Advisers to the Government for
disinvestment transactions were prescribed by the Department of Disinvestment vide
its O.M. No. 5/3/2011 – Policy dated 2.5.2011.

2. In supersession of the above-mentioned O.M. of this Department, the revised

criteria for qualification/disqualification of the parties to act as Advisers for
disinvestment transactions would be as under:

(a) Any conviction by a Court of Law or indictment/adverse order by a regulatory

authority for a grave offence against the Advising concern or its sister concern
would constitute a disqualification. Grave offence would be defined to be of
such a nature that it outrages the moral sense of the community. The decision
in regard to the nature of offence would be taken on a case-to-case basis after
considering the facts of the case and relevant legal principles by the
Government. Similarly, the decision in regard to the relationship between the
sister concerns would be taken based on relevant facts and after examining
whether the two concerns are substantially controlled by the same
person/persons.

(b) In case such a disqualification takes place, after the entity has already been
appointed as Adviser, the party would be under an obligation to withdraw
voluntarily from the disinvestment process, failing which the Government would
have the liberty to terminate the appointment/contract.

(c) Disqualification shall continue for a period that Government deems appropriate.

(d) Any entity, which is disqualified from participating in the disinvestment process,
would not be allowed to remain associated with it or get associated merely
because it has preferred an appeal against the order based on which it

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 has been disqualified. The mere pendency of appeal will have no effect on the
disqualification.

(e) The disqualification criteria would come into effect immediately and would apply
to all the Advisers already appointed by the Government for various
disinvestment transactions, which have not yet been completed.

(f) Before disqualifying a concern, a Show Cause Notice why it should not be
disqualified would be issued to it and it would be given an opportunity to explain
its position.

(g) Henceforth, these criteria will be prescribed in the advertisements seeking

Expressions of Interest (EOI) from the interested parties to act as Adviser.
Further, the interested parties shall be required to provide with their EOI an
undertaking to the effect that no investigation by a regulatory authority is
pending against them. In case any investigation is pending against the concern
or its sister concern or against the CEO or any of its
Directors/Managers/Employees, full details of such investigation including the
name of the investigating agency, the charge/offence for which the investigation
has been launched, name and designation of persons against whom the
investigation has been launched and other relevant information should be
disclosed, to the satisfaction of the Government. For other criteria also, similar
undertaking will be obtained along with EOI. They would also have to give an
undertaking that if they are disqualified as per the prescribed criteria, at any
time before the transaction is completed, they would be required to inform the
Government of the same and voluntarily withdraw from the assignment.

(h) The interested parties would also be required to submit a list of or disclose any
mandated transactions which are in the same line of business as that of the
company (being disinvested) in respect of any transaction of same nature as
the transaction for which the Government and/or the Company (being
disinvested) is proposing to select or have appointed the Adviser and confirm
in writing that there exists no conflict of interest as on the date of submitting
their proposal for appointment/ their appointment as Advisers in handling of the
transaction and that, in future, if such a conflict of interest arises, the Adviser
would immediately intimate the Government/Company (being disinvested) of
the same.

The Government/Company (being disinvested) shall at its sole discretion after

providing due and reasonable opportunity decide whether such future conflict
of interest shall materially adversely affect the interest of the Government and
the Company (being disinvested) in relation to the transaction and shall be
entitled to grant the consent to the Adviser to continue as Adviser or terminate
the appointment of the Adviser. For disinvestment purposes, conflict of interest
is defined to include engaging in any activity or business by the Adviser in
association with any third Party, during the engagement, which would or may
be reasonably expected to, directly or indirectly, materially adversely affect the
interest of Government of India and/ or the Company (being disinvested) in
relation to the transaction, and in respect of which the

Page 22 of 26
 Adviser has or may obtain any proprietary or confidential information during the
engagement, that, if known to any other client of the Adviser, could be used in
any manner by such client to the material disadvantage of Government of India
and/ or the Company (being disinvested) in the transaction.

(i) The conflict of interest would be deemed to have arisen if any Adviser in respect
of the transaction is appointed by a third party for advising or acting on behalf
of or associated with any other person or entity (including any company,
partnership, proprietary concern or individual or an HUF or association of
persons or body of individuals) which is engaged in the same line of business
as that of the Company (being disinvested), in respect of any transaction of
same nature as the transaction for which the Government and/or the Company
(being disinvested) is proposing to select or have appointed the Adviser.
Further, the decision of the Government/Company (being divested) as to
whether such other person or entity is engaged in the same line of business as
that of the Company being disinvested, shall be final and binding on the Adviser.

(j) The conflict of interest would also be deemed to have arisen if any Adviser firm/
concern has any professional or commercial relationship with any bidding firm/
concern for the same disinvestment transaction during the pendency of such
transaction. In this context, both Adviser firm and bidding firm would mean the
distinct and separate legal entities and would not include their sister concern,
group concern or affiliates etc. The professional or commercial relationship is
defined to include acting on behalf of the bidder or undertaking any assignment
for the bidder of any nature, whether or not directly related to disinvestment
transaction. (This clause is applicable in strategic sale only).

(k) The interested parties would also be required to give information and disclose
that as on the date of submitting their proposal for appointment/ their
appointment as Advisers in respect of the transaction, they are advising or
acting on behalf of or associated with any other person or entity (including any
company, partnership, proprietary concern or individual or an HUF or
association of persons or body of individuals) which is engaged in the same line
of business as that of the Company (being disinvested), in respect of any
transaction of same nature as the transaction for which the Government and/or
the Company (being disinvested) is proposing to select or have appointed the
Adviser.

- In the event the Adviser fails to disclose that it is advising or acting on behalf
of or associated with any other person or entity which is engaged in the same
line of business as that of the Company (being disinvested), in respect of any
transaction of same nature as the transaction for which the Government and/
or the Company (being disinvested) is proposing to select or have appointed
the Adviser, at the time of giving the afore-mentioned undertaking, the
Government/Company (being disinvested) shall be entitled to terminate their
appointment. Before terminating the appointment, a show cause notice stating

Page 23 of 26
 why its appointment should not be terminated would be issued giving it an
opportunity to explain its position.

(l) For a period commencing from the date of appointment of the Adviser till the
completion of the transaction, the Adviser shall keep the Company/
Government informed of any mandate/contract entered into to advise or act on
behalf of or associate itself with, any other person or entity (including any
company, partnership, proprietary concern or individual or an HUF or
association of persons or body of individuals) which is engaged in the same line
of business as that of the Company being disinvested, in respect of any
transaction of same nature as the transaction in respect of which the Adviser
has been appointed as the Adviser. Provided that, if six months or more have
elapsed from the date of appointment as Adviser to the government
disinvestment transaction, the Adviser would normally be permitted by the
Government/Company (being disinvested), save for exigent circumstances.
The decision of the Government/Company (being disinvested) in this regard
shall be final and binding on the Adviser. Further, the decision of the
Government/Company (being divested) as to whether such other person or
entity is engaged in the same line of business as that of the Company being
disinvested, shall be final and binding on the Adviser.

(m) For the purpose of clauses (k) and (l) above, the ‘nature’ of transaction may
include, but not be limited to, a capital market transaction which in turn could
include, but not be limited to, a domestic offering of shares or any other security,
whether by way of Further Public Offer or further public offer or qualified
institutions placement or issue of IDRs or by any other manner, as well as the
international offering of securities, whether by way of issue of ADRs, GDRs or
FCCBs or by any other manner.

(n) In the event the Adviser fails to obtain the prior written consent of the
Government/Company (being disinvested) as aforesaid, the Government/
Company (being disinvested) shall be entitled to terminate the appointment of
the Adviser. Before terminating the appointment, a show cause notice stating
why its appointment should not be terminated would be issued to the Adviser
giving it an opportunity to explain its position.

(V.P. Gupta)
Deputy Secretary to the Government of India
Tel: 2436 8036

Page 24 of 26
 Annexure - IV

FORMAT OF UNCONDITIONAL BID ON THE LETTERHEAD OF THE BIDDER

This is to certify that the fee quoted by us for engagement as Book Running Lead
Managers for disinvestment in RailTel through “Initial Public Offer” is in accordance
with the terms and conditions laid down in the Request for Proposals displayed on the
website of the Department of Investment and Public Asset Management and is
unconditional.

Seal with signatures of authorized signatory of the Merchant Banker

Page 25 of 26
 Annexure V

STATEMENT SHOWING RESEARCH REPORTS DETAIL

Domestic Staff No. of Date of

Strength (in Research Publication Rating Target
S.No Price
Number) Publication of Last
Report
A. Sectors
1.
2.
3.
4.
5.
B. CPSE sector Companies
1.
2.
3.
4.
5.

Page 26 of 26