Reliance Power Ltd’s initial public offer appears set to break all records
Anil Ambani Group firm Reliance Power Ltd’s initial public offer appears set to break all records in the primary market as it drew a massive response from retail and institutional investors alike who bid to buy shares worth over Rs 1,00,000 crore on the first day itself.
The IPO was fully subscribed in the first 60 seconds after it opened and oversubscribed 6.75 times at the top end of the price band an hour after opening, he said. The shares were offered in a price band of 405-450 rupees (US$10.31-US$11.46; euro6.92-euro7.69). The Reliance Power share offer closes Friday.
So much was the demand for the issue that investors encashed a part of their holdings in the secondary market to buy its shares, pulling the benchmark BSE Sensex down by almost 477 points. Even power stocks, including parent firm Reliance Energy Ltd, ended in losses on the bourses.
The Qualified Institutional Buyer (QIB) segment of the IPO was oversubscribed 17 times, while the high net worth individual (HNI) segment was oversubscribed 7.4 times. The portion reserved for retail investors received bids for close to 1.4 times the shares on offer, market sources said.
The issue is being managed by UBS, JPMorgan, ABN Amro, Deutsche Equities, Kotak Mahindra, Enam Securities, ICICI Securities and JM Financial.
Profile of Reliance Power Ltd.
Reliance Power Limited is part of the Reliance Anil Dhirubhai Ambani Group and is established to develop, construct and operate power projects domestically and internationally. The Company on its own and through subsidiaries is currently developing 13 medium and large sized power projects with a combined planned installed capacity of 28,200 MW, one of the largest portfolios of power generation assets under development in India. Our 13 power projects are planned to be diverse in geographic location, fuel type, fuel source and off-take, and each project is planned to be strategically located near an available fuel supply or load center. The identified project sites are located in western India (12,220 MW), northern India (9,080 MW) and northeastern India (2,900 MW) and southern India (4,000 MW). They include six coal-fired projects (14,620 MW) to be fueled by reserves from captive mines and supplies from India and abroad, two gas-fired projects (10,280 MW) to be fueled primarily by reserves from the Krishna Godavari Basin (the “KG Basin”) off the east coast of India, and four hydroelectric projects (3,300 MW), three of them in Arunachal Pradesh and one in Uttarakhand. Reliance Power has acquired the two ultra mega power projects of 4,000 MW each at Sasan in Madhya Pradesh and Krishnapatnam in Andhra Pradesh. The 7,480 MW project to be located at Dadri in Uttar Pradesh is expected to be the largest gas-fired power project at a single location in the world.