Its board is scheduled to meet on February 24 to consider issuing bonus shares and/or other measures which it said will effectively reduce the cost of the company's shares. ''This will include a proposal for issuing free bonus shares to all categories of shareholders excluding the promoter group, thereby protecting investors from even short-term losses on their shareholdings,'' a company statement said. It said that its shares were hit by weak market sentiments and blamed rivals, who were not identified, for hammering shares of companies in the Anil Dhirubhai Ambani Group. It also reminded investors that there were risks attached to equity investments.
''Equity shares, by their very nature, are risk-bearing instruments and there is no obligation on behalf of any issuer to insure investors against possible losses,'' the release stated. Reliance Power's shares, which were listed on the stock exchange on February 11, had fallen by a quarter but recovered to close 15 per cent below the IPO price of Rs 450 a share on Friday, helped by three-day market rally which saw the benchmark index climb nine per cent.
However, the company's board will consider a bonus issue and other steps as the group had a ''fundamental and over-riding philosophy of creating value for genuine long term investors.'' Reliance Power has the world's largest shareholder family of nearly 500 overseas and domestic institutional investors, and over four million retail investors. The company is implementing power projects with aggregate capacity of over 28,000 MW, by far the largest development pipeline in the country. Reliance Communications, another Anil Ambani firm, is also planning an IPO for its telecom towers unit, Reliance Infratel Ltd.