Reliance Power set to hit markets

Jan 05, 2008 Stock Market

The Anil Ambani group company Reliance Power has finally got the go-ahead for it’s IPO after clearing all regulatory hurdles. It is slated to be the largest IPO (Rs.11,500 crore) in the Indian markets, eclipsing the DLF IPO (Rs.9,625) by a mile.

The company proposes to issue 26 crore equity shares of Rs. 10 each, including promoters’ contribution of 3.2 crore shares which will be allotted at the IPO price to the promoters. The balance 22.8 crore equity shares will constitute the net issue to the public. The price band has been fixed at Rs. 405-450, which certainly doesn’t make it cheap by any standards for a company that doesn’t even exist !!

As it was to be expected in any Ambani company IPO, there always HAS to be something different, so the company is offering a discount of Rs. 20 per share to retail investors. As if this was not enough, HNIs and retail investors also have the option to make a part payment, which is Rs.115 per share.

The IPO is scheduled to open on January 15 and close on January 18. I’ve yet to decide whether I will apply, though.

Update: Well, I’ve waited till the last day to apply, paying just under Rs.26K using the part payment option. Seeing the number of times the issue has been oversubscribed, I think there is a slim chance of getting some fully paid-up shares after all