Reliance Power IPO oversubscribed 10.5 times

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Mumbai, Jan 15 (UNI) The ever-largest initial public offer (IPO) by Reliance Power in the Indian equity market was oversubscribed 10.52 times at the end of the first day of the issue.

The issue witnessed a strong demand today, as it collected a bid of about one lakh crore rupees on its upper price of Rs 450 per share. It received bids for 1.84 billion shares as against 26 crore shares on offer.

Reliance Power, an ADAG group company, is offering 26 crore equity shares through this issue in the price band of Rs 405-450 per share to raise Rs 10,530-11,700 crore (USD 2.67-2.97 billion).

The net issue to the public is 22.8 crore shares to raise between Rs 9,234-10,260 crore. The promoters have pumped in Rs 1,440 crore at Rs 450 per share as against 3.2 crore shares.

The issue will close on January 18. The net issue would constitute 10.1 per cent of post-issue paid-up capital of the company. Shares outstanding, post-issue, would be 226 crore, while the market capitalisation of the company would be Rs 91,530 crore to Rs 1,01,700 crore (USD 23.23 to 25.8 billion), a leading broker said.

However, Reliance Energy shares closed 4.4 per cent lower, down by 2.3 per cent, during the day following the sharp fall in the Indian bourses.

Amid the market frenzy for the IPO, some analysts cautioned that it would be hard to value Reliance Power at its nascent stage, as presently it does not have any power plants.

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