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(Updates with start of trade)
MUMBAI, Feb 11 (Reuters) - Reliance Power <RPOL.BO>, which
last month made India's largest-ever initial public offering of
$3 billion, fell at its debut on the stock market on Monday,
dropping more than 13 percent in turbulent opening trade.
The utility, part of the Anil Dhirubhai Ambani Group, had
sold out within a minute when it opened its record IPO in January
and it priced the offer at 450 rupees ($11.40) a share, the top
of the pricing band.
Analysts had initially expected the share price to double
when it began trading on Monday but stock market turmoil has
lowered investor risk appetite and analysts subsequently said a
start of 75-150 rupees above the IPO price was more realistic.
In the event, the share <RPOL.NS> opened at 450 rupees but
quickly dropped to a low of 389 rupees, according to data from
the Bombay Stock Exchange and the National Stock Exchange,
although in opening volatility it also rose briefly to 599.90.
By 0445 GMT, the share was 1.4 percent down at 443.55 rupees,
with the benchmark index <.BSESN> 0.4 percent lower.
"This is not surprising because the global market scenario
has affected this IPO, which is its latest casualty," said Jigar
Shah, senior vice-president at KIM ENG Securities India Private
Ltd.
Reliance Power's IPO was subscribed 73 times, even though
analysts said the company was unlikely to report strong profits
for five years.
But market conditions have altered sharply since then, with
jittery global sentiment triggered by U.S. recession worries
taking the benchmark index down about 18 percent from an all-time
high of 21,206.77 hit on Jan. 10.
The turbulence also derailed two IPOs last week, with first
Wockhardt Hospitals Ltd and then Emaar MGF Land, an Indian joint
venture of Dubai's Emaar Properties <EMAR.DU>, shelving their
offerings due to poor response and worries the shares would fall
at their debut.
Reliance Power was the world's biggest IPO so far in 2008,
making India the largest IPO market this year to date, according
to Thomson Financial. Until Wockhardt and Emaar MGF shelved their
offers, India had a record IPO pipeline.
The issue was helped by the Ambani family name, stemming from
the success of the Reliance group of companies founded by
Dhirubhai Ambani that had handsomely rewarded shareholders.
"I am confident that long-term investors will reap good
returns on their investments in shares of Reliance Power,
regardless of short-term fluctuations," Reliance Power Chairman
Anil Ambani told the Hindustan Times in an email interview ahead
of Monday's listing.
The issue was managed by Kotak Mahindra Capital Co., UBS
<UBSN.VX>, ABN AMRO <AAH.AS>, Deutsche Equities <DBKGn.DE>, Enam
Securities, ICICI Securities, JM Financial <JMSH.BO> and JPMorgan
<JPM.N>.
($1 = 39.6 rupees)
(Reporting by Hiral Vora; Writing by Charlotte Cooper; Editing
by Ranjit Gangadharan)
(([email protected] +91 22 6636 9030 Reuters
Messaging: [email protected]))
Keywords: RELIANCEPOWER/IPO