Electrifying Response of Reliance Power IPO
The initial public offering of India’s Reliance Power was fully subscribed by investors within a minute after it opened on Tuesday, making it India’s biggest IPO with estimated proceeds of 3 billion dollars.
Offered at a price band of Rs.405-450 for 228 million shares at a face value of Rs 10 each, the issue invited bids for 2,397,558,825 shares, data available with the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) showed.
While institutional buyers were required to pay 10 per cent of the subscription money on application, retail investors had to pay Rs 115, which is around 25 per cent of the issue price.
Ambani and his associates bought the promoters’ stake of 32 million shares at Rs 450 per share on the opening day. Thirty percent of the 228 million shares have been reserved for retail investors at a discount of 5 per cent.
The issue will close for subscription on January 18, 2008. Net issue would constitute 10.1% of post issue paid up capital of the company. Shares outstanding post issue would be 226 crore shares. Market cap of the company would be Rs 91530–Rs 101700 crore (USD 23.23 – 25.8 billion).
Power generation company has 13 projects, out of which 6 are under development now.
* 7 coal based projects – 14,620 MW
* 2 gas bsed – 10,280 MW from KG basin
* 4 Hydroelectric projects – 3300 MW
Company intends to use IPO money for part financing power subsidiaries, which are pursuing 13 power generation projects. Out of which, 11 projects are to developed by nine subsidiaries; one is being directly executed by Reliance Power and one project under subsidiary is yet to be transferred. Rest of the money will be used for general corporate purposes and to get benefit of listing.