RailTel Corporation shares trade at 43% premium in grey market ahead of IPO

RailTel Corporation of India, one of the largest neutral telecom infrastructure providers in India, traded at a 43 percent premium to the issue price in the grey market on February 11, ahead of public issue opening next week.

The public offer will open for subscription on February 16 and the same will close on February 18. The company has fixed issue price band at Rs 93-94 per share.

The Mini-Ratna category company's equity shares traded at a premium of Rs 35-40 in the grey market, which is 37-43 percent premium over the higher price band of Rs 94, the data available on the IPO Watch showed. The premium has seen significant increase from Rs 10-15 premium available till February 11.

The issue, which comprises a full offer for sale of 8,71,53,369 equity shares by the Government of India, will fetch the government Rs 819.24 crore at higher price band.

The objectives of the offer are to carry out the disinvestment  and to achieve the benefits of listing the equity shares on the stock exchanges. Hence, the company will not receive any proceeds from the offer and all proceeds will go to the selling shareholder.

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RailTel is one of the largest neutral telecom infrastructure providers in the country, having a 59,098 route kilometers of optical fiber cable network which has connected 5,929 railway stations across towns and cities in India, as of January 2021.

RailTel offers a diversified portfolio of ICT services and solutions including MPLS-VPN, leased lines services, TPaaS, e-Office services and data center services, large network hardware system integration, software and digital services to enterprises, public sector banks, defense organisations and educational institutions. The company operates through data centers located in Gurugram, Haryana, Secunderabad and Telangana to host and collocate critical applications for customers including the Indian Railways.

RailTel is also appointed by the Ministry of Railways for implementation of the hospital management information system and also allotted its e-Office Project Phase 3 project to RailTel.

ICICI Securities, IDBI Capital Markets & Securities and SBI Capital Markets are appointed as the book running lead managers to the Offer.