The shares rose at one stage 40p above the part-paid retail price of 190p, and closed 30.5 p up at 220.5p, a 16 per cent premium on the 190p a share paid by private investors.
After heavy oversubscription by institutions and retail investors, the success of the offer on the first day of trading was welcomed with delight by the Government but scorned by the opposition.
Clare Short, Sir George's Labour shadow, repeated her threat that a Labour government would move to tighten railway regulation, adding "We have said this will not be a gravy train. There will not be the big, fat instant profits at public expense that there have been in other privatisations."
At a typical sale price during the day of 222p, holders of the minimum of 200 shares would have made a profit of about pounds 57 after dealing expenses of pounds 7.50, said The Share Centre, one of the share shops handling the issue.
An average holder of Railtrack awarded 350 shares would have made pounds 105 profit after the same dealing expenses, on an investment of pounds 665. On a fully paid basis, Railtrack's paper value has risen pounds 130m above the float price, to more than pounds 2.1bn.
Robert Horton, chairman of Railtrack, said he was not surprised that some small investors had stagged the issue, by buying to sell immediately.
"We have the basis of a loyal shareholding once the fuss and bother has died down, and that is the important thing," he said.
Mr Horton added he was delighted that 90 per cent of the staff had taken up the shares made available to them, and he pledged that the privatisation would soon deliver benefits to customers.
"There is no conflict between the interests of shareholders and of the travelling public" he claimed.
Mr Horton said that the public would soon see improvements because since 10 December last year Railtrack had been operating a thousand electronic clocks around the country measuring the performance of trains - and putting a price on delays.
This might price a minute's delay in the rush hour at Waterloo at pounds 150 but on an obscure branch line at only pounds 10. The technology allowed Railtrack and the train operators to decide in "real time" - during the 8 hour shifts in which the delays were happening - whose fault it was and how to apportion the costs.
The result was a formidable database for Railtrack on where the most costly delays were to be found, said Mr Horton. This in turn would focus capital spending and asset maintenance where it would have the maximum effect. "If a particular set of points is costing thousands a week then we know to get someone down there to get it sorted out," added Mr Horton.
The surge in the share price came as City institutions, which had seen their allocations cut back to make way for private investors, bought heavily in the market to make up their holdings.
With Railtrack volume at 167m - 22 per cent of the market - the total number of shares traded was 83 million, or 16 per cent of the number the Government sold.
The issue was heavily oversubscribed, with at least pounds 12bn cash chasing pounds 1.9bn of shares, allowing the Government to sell at 390p a share, the top of its promised price range. Institutions paid 200p for the first instalment and were seeing a premium of 10 per cent at the close.
About 9 per cent of successful applicants stagged the issue, said Gavin Oldham, chief executive of The Share Centre.
Sir George Young, the transport secretary, disclosed last night that the Government was to receive pounds 1.67bn from the sale so far, though the total for the company is pounds 1.93bn when over-allotment options held by Warburg are included.Reuse content