Reliance Power issue subscribed 10.5 times over

Thursday, 17 January 2008, 01:49 IST
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New Delhi: The mega initial public issue of Anil Dhirubhai Ambani group's Reliance Power became the largest ever in India after over-subscription of more than 10.5 times on its opening day on Tuesday. Offered at a price band of 405-450 for 228 million shares at a face value of 10 each, the issue invited bids for 2,397,558,825 shares, data available with the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) showed. The issue closes Jan 18. While institutional buyers were required to pay 10 percent of the subscription money on application, retail investors had to pay 115, which is around 25 percent of the issue price. In addition, Ambani and his associates bought the promoters' stake of 32 million shares at 450 per share on the opening day. Thirty percent of the 228 million shares have been reserved for retail investors at a discount of 5 percent. "Within minutes of its opening, the issue was fully subscribed and by the time it ended at 5 pm, the issue had been oversubscribed some 10.54 times," said a senior official at one of the lead book running firms for the issue. The over-subscription came on a day when the 30-share sensitive index (Sensex) of the Bombay Stock Exchange shed 476.96 points, or 2.30 percent, at 20,251.09 points. "It seems like people sold some stocks for the public issue," said an analyst with a leading brokerage here, as every index, including those for small-caps and mid-caps, on the BSE ended in the red. The largest public issue previously, that of the New Delhi-based DLF Ltd last year, was able to muster $2.4 billion. Offers by Cairn India, Tata Consultancy Services and NTPC Ltd were also sizeable. Reliance Power proposes to use the funds to build power generation units across the country with the funds. As per company officials, projects worth 28,000 MW are in the pipeline. "This is the largest portfolio of power generation within a geographical area or a group anywhere in the world," Ambani had told a press conference earlier. The government envisages an addition of 80,000 MW in the 11th plan (2007-2012). The company, which is an associate of Reliance Energy, was in November awarded the 4,000-MW Krishnapatnam power project in Andhra Pradesh, with the lowest bid for a tariff of 2.33 per unit among all qualified bidders. Another major project of the company was the 4,000-MW Sasan power project in Madhya Pradesh, awarded in August.
Source: IANS