The initial public offering of Reliance Power promoted by Anil Dhirubhai Ambani got over-whelming response in the primary market. The 26 crore issue was subscribed 9.69 times. The IPO has received bids for 220.98 crore shares. (As at 16:00 IST)The company has come out with an IPO in the price band of 405-450 per share. The issue opened today and will close on 18 January 2008.
Retail investors have been offered a discount of Rs 20 per share, which implies their net cost of subscription will be Rs 430 per share, if they choose to bid at Rs 450 per share. Retail investors also have the option of making part payment of the application monies, wherein they will have to put in only Rs 115 per share upon application. The balance will be called upon, post the allotment of partly paid shares.
Rating agency Crisil assigned an above average 4-on-5 rating to the proposed initial public offer of Reliance Power. ICRA has assigned IPO Grade 4, indicating above average fundamentals, to the IPO. ICRA assigns IPO grading on a scale of 5 to 1, with Grade 5 indicating strong fundamentals and Grade 1 poor.
It is estimated that at this issue price the company's market cap will be anywhere around Rs 1.1 lakh crore, which will make it the biggest listed company within the Anil Ambani empire and among the top 10 stocks on the Bombay Stock Exchange.
The company plans to use the issue proceeds to fund subsidiaries to part-finance the construction and development costs of its projects under development and for general corporate purposes.
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