Street signs: Railtel GMP at 30%, Bitcoin mirrors equity, and more

At the IPO price, Railtel will have a market cap of Rs 3,000 crore.
Railtel GMP at 30%

Shares of state-owned Railtel Corporation of India are changing hands at a premium of over 30 per cent to its IPO price in the grey market, said people in the know. While the IPO price band is Rs 93-94 per share, grey market operators are offering over Rs 122 per share. Railtel’s Rs 820-crore IPO opens on Tuesday. The offering is entirely an offer for sale by the government. At the IPO price, Railtel will have a market cap of Rs 3,000 crore. In FY20, the company had clocked net profit of Rs 140 crore on revenues of Rs 1,128 crore.

Analysts bullish on vehicle financiers

Shares of both Shriram Transport Finance and Mahindra & Mahindra Financial Services have rallied about 30 per cent in the past two weeks. With the benchmark indices hovering around lifetime highs, investors are looking for bottom-up ideas. Analysts say vehicle finance stocks can be attractive bets. “These companies are best positioned to leverage the overall revival in the economy. Also, supportive liquidity conditions, dip in the cost of capital, cyclical recovery, and a pick-up in rural demand are the key positive triggers,” said an analyst. The overall NBFC space has got de-rated following the IL&FS crisis and many stocks continue to trade at a discount to their long-term averages, he added. 

Bitcoin mirrors equity

Investors looking to invest in cryptocurrencies as a hedge from equities should think twice. Bitcoin has shown a positive correlation with equities in the past year. The cryptocurrency gained 305 per cent in 2020 and is up 65 per cent YTD. It is near record highs and is trading at above $47,700 levels currently. The S&P 500, on the other hand, gained 16 per cent last year and is up 4 per cent in 2021 to 3,900 levels, also a record high. Bitcoin has fallen in tandem with the benchmark index a few times as well — both asset classes slumped in September, for instance, in the run-up to the US presidential elections. 

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