RailTel in Trouble? NSE and BSE Impose Rs. 28 Lakh Fine for SEBI Violations; Here's What Happened

PSU Navratna Company Railtel Corporation of India, under the Ministry of Railways, has disclosed that both the National Stock Exchange (NSE) and BSE have imposed penalties amounting to a total of Rs. 28 Lac for the quarter ending March 31, 2025, due to non-compliance with board and committee composition norms under SEBI regulations.

Reason for the Imposed Penalty on RailTel

According to the official exchange filing dated May 31, 2025, "the penalty was levied for non-compliance with several SEBI Listing Obligations, specifically, Regulations 17(1), 17(2A), 18(1), 19(1)/19(2), 20(2)/20(2A), and 21(2). These relate to the composition of the Board of Directors and various mandatory board committees such as the Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee, and Risk Management Committee."

RailTel's Clarification

As a clarification, RailTel, in an exchange filing, stated that the appointment of directors, including independent and woman directors, falls under the jurisdiction of the President of India through the Ministry of Railways, as per the company's Articles of Association. The company emphasised that these compliance gaps were beyond its control, as it has no direct role in nominating or appointing directors.

RailTel also mentioned that repeated requests had been made to the Ministry of Railways for the timely appointment of independent directors to ensure compliance.

As per the company's disclosure, the imposed fines have no impact on RailTel's financials or operations. The penalty is considered a procedural compliance issue rather than an operational shortcoming.

Recent Board Appointments

To address the compliance issues, RailTel recently informed the exchanges of two appointments which came through formal orders issued by the Ministry of Railways.

• Dr Subhash Sharma was reappointed as Additional Director (Independent) effective April 15, 2025.
• Smt Asha Sharma was appointed as Additional Director (Independent) effective May 13, 2025.

RailTel Share Price Movement

At the end of Friday's close, RailTel Corporation of India's share price saw a decline of Rs. 7.25, or a 1.80% drop for the day. While the stock has shown some weakness in the short term, Railtel shares have declined by 2.68% over the past five trading days. Over the past month, RailTel shares have delivered a robust 25.28% gain. In long-term performance, the stock has posted returns of over 226.25% in the last five years.

RailTel Q4 Q4FY25 Results

RailTel Corporation of India released its financial results for the fourth quarter of FY 2024-25 on Thursday, May 1. The company reported a strong performance, with net profit soaring 46.3% year-on-year to Rs. 113.4 crore, up from Rs. 77.53 crore in the corresponding quarter of the previous fiscal.

The company's revenue from operations also increased by 57% to Rs 1,308.28 crore, compared to Rs 832.7 crore in Q4 Q4FY24. The EBITDA of the company grew by 53.8%, reaching Rs 180 crore, as against ₹117 crore in the same quarter last year. However, the EBITDA margin slightly declined by 27 basis points (bps) to 13.73%, down from 14%.

About RailTel Corporation

RailTel Corporation of India Limited is a Navratna public sector enterprise under the administrative control of the Ministry of Railways. Established in the year 2000, the company is modernising railway communication systems. RailTel has grown into one of the largest neutral telecom infrastructure providers in India. Raitel received the Navratna status in August 2024. The company operates pan-India with an optic fibre network, covering major cities and rural regions as well.