Reliance Energy slips despite strong response to RPower IPO

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Mumbai, Jan 15 (UNI) Reliance Energy plummeted by 0.61 per cent to Rs 2,459 in the mid-morning session at the Bombay Stock Exchange (BSE), even as the Initial Public Offering (IPO) of its unit, Reliance Power, was oversubscribed within minutes of the opening of the issue.

Brokers said that the BSE Sensex was down by 149.90 points or 0.72 per cent to 20,578.23 during the same period.

At BSE, 3.65 lakh shares changed hands at the counter. The stock had an average daily volume of 14.91 lakh shares on BSE in the past one quarter.

The stock hit a high of Rs 2,535 and a low of Rs 2,447 so far during the day. The scrip had touched a 52-week high of Rs 2,631.70 on January 10, 2008 and a 52-week low of Rs 448.20 on March 5, 2007.

Reliance Energy, India's second largest power utility by revenue, outperformed the market over the past one month till January 11, 2008, rising by 30.06 per cent compared to the Sensex's rise of 3.60 per cent. It also outperformed the market over the past one quarter, surging 51.93 per cent to Sensex's gain of 13.08 per cent.

The Company's current equity share capital is Rs 236.50 crore and the face value per share is Rs 10.

At the current price of Rs 2,459, the PE multiple works out to 38.07 based on Q2 September 2007 annualised EPS of Rs 64.59.

As per latest data, the Reliance Power IPO was subscribed 6.75 times. The IPO received bids for 153.86 crore shares compared to issue size of 22.80 crore shares. Most of the bids were at the top end of the Rs 405 to 450 price band.

The issue opened today and closes on January 18. At the lower end of the price band, the Company would raise Rs 10,530 crore and at the higher price band it would garner Rs 11,700 crore.

Reliance Power is the largest IPO of the country till date, surpassing real estate major DLF, which raised Rs 9,190 crore through IPO in 2007.

The promoters of Reliance Power, Reliance Energy (REL) and AAA Projects, will hold about 45.025 per cent stake each after the IPO.

Reliance Energy currently holds 50 per cent stake in Reliance Power.

Reliance Energy is engaged in generating, transmitting and distributing electricity. It also provides electrical contracting, engineering, procurement and construction contracts and computer services, a leading dealer said.

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