Mumbai, Feb 24 : Anil Dhirubhai Ambani Group (ADAG) Reliance Power on Sunday set a 3-for-5-bonus share issue to cheer shareholders after a miserable debut into stock markets following a record three-billion dollars initial public offer (IPO).
Shareholders other than the founders will receive three bonus shares for every five held, effectively reducing the cost of the shares to 269 rupees for retail shareholders compared to a discounted IPO price of 430 rupees.
For institutions, the bonus issue would cut the price to 281 rupees a share compared to an IPO price of 450 rupees.
ADAG Chairman Anil Ambani said he was also giving up 2.6 percent of his shareholding in Reliance Power to Reliance Energy Ltd, which owns about 45 percent in Reliance Power, so its ownership structure remains intact.
"Since the past 45 days, we have seen very turbulent conditions in the global and the Indian markets. Reliance power closed at a time when the Indian sensitive index was at its near all time high," he told a press conference.
He added that after considering these adverse changes, the board has decided on a bonus issue to protect the interests of long-term investors.
"The board has chosen in the interest of our long term shareholders to consider and approve a bonus issue to all shareholders excluding the promoters," said Ambani.
The Reliance Power offer was fully subscribed within a minute of its opening and had attracted bids worth 190 billion dollars from over four million investors in January, just days before stock markets worldwide went into a tailspin.