RailTel share's grey market premium rises to 42% ahead of IPO

The grey market premium (GMP ) of RailTel Corporation share rose to 42% ahead of the public sector undertaking's initial public offer (IPO) set to open next week. The public offer of Mini-Ratna company RailTel Corporation of India opens for subscription on February 16 and closes on February 18. Price band for the issue has been fixed at Rs 93-94 per share.

The offer for sale by one of the largest neutral telecom infrastructure providers in India, traded at a premium of Rs 40 in the grey market, implying a premium 42% over the upper end of price band. Earlier on February 9, the price had traded at a premium of Rs 5-10.

The Rs 819.24 crore issue, 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).

As per the company's DRHP, the net proceeds from RailTel Corporation of India's Rs 819.24 crore initial public offer will be used toward following purposes 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. The shares are proposed to be listed on BSE, NSE.

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

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