REL board approves IPO proposal

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Mumbai, Sep 30: Ending market speculations, Reliance Energy Limited (REL) director board, which met here today, approved the proposed Initial Public Offering (IPO) of Reliance Power Limited and Reliance Anil Dhirubhai Ambani Group (ADAG).

The offer, which is expected to be the biggest ever witnessed by the Indian share market, is expected to mop up Rs 11,000-12,000 crore from the public.

According to the sources, the issue may hit the market in two-three months.

Reliance power will file the draft red herring prospectus with SEBI shortly.

''Reliance Power Limited is pursuing various gas, coal and hydro power generation projects in different parts of the country. The proposed IPO is being undertaken to fund the development of the said power projects.'', said company in a statement today.

The projects, expected to be financed by the share sale includes the Rs 21,000-crore ultramega power projects of Reliance Power in Sasan and Rosa in UP.

Reliance Power is expected to offload 15-20 per cent shares for the issue.

Reliance Energy has 50 per cent shares in Reliance Power while the rest is owned by the Reliance ADAG.

Kotak Mahindra and J M Financial are among the investbanks likely to lead the issue.

The Reliance Energy stocks closed at Rs 1205.50 in the Bombay Stock Exchange (BSE) on Friday, up by 7.9 per cent compared to Thursday's close.

Reliance Anil Dhirubhai Ambani Group currently has market capitalization of over Rs 2,00,000 crore, net worth in excess of Rs 40,000 crore, cash flow of Rs 9,000 crore, net profit of Rs 5,000 crore and zero net debt.

UNI

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