RailTel grey market premium rises to 50% ahead of IPO

The public offer Mini-Ratna category company, RailTel Corporation of India opens for subscription on February 16. The issue, which closes on February 18, will have a price band of Rs 93-94 per share.

The grey market premium (GMP) of RailTel was trading at Rs 141 in the grey market, at a premium of Rs 47-50% over the price band of Rs 94.

Earlier on February 11, the price traded at a premium of Rs 10-15 in the grey market. On February 9, the price had traded at a premium of Rs 5-10.

The Rs 819.24 crore issue of the state-owned RailTel Corporation of India is a complete offer for sale of 8,71,53,369 equity shares by the Government of India. The minimum market lot size for the IPO is 155 shares, where an individual investor can apply for up to 13 lots (2015 shares or Rs 189,410). Equity shares are proposed to be listed on BSE and NSE.

As per the company's DRHP, the net proceeds from RailTel Corporation of India's Rs 819.24-crore initial public offer are to be used for carrying out the disinvestment plan and to achieve the benefits of equity share listing on the stock exchanges. The company will not receive any proceeds from the offer.

The President of India, acting through the Ministry of Railways is the promoter of the company. KFintech Private Limited is the registrar for the IPO.

Incorporated in 2000, the Information and Communication Technology (ICT) infrastructure provider company has covered an optic fibre network of over 55,000 Km and 5677 railway stations as of 30 June 2020 and has data centres in Haryana, Gurugram, Secunderabad, and Telangana.

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