Reliance Power drops on market debut


Mumbai : Reliance Power Ltd (RPL), which last month made the largest ever initial public offer (IPO) in India, slid sharply by over 9 percent Monday afternoon despite listing at Rs.548 at the Bombay Stock Exchange (BSE), a premium of more than 20 percent over its offer price of Rs.450.

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RPL, a subsidiary of Reliance Energy Ltd and part of the Reliance Anil Dhirubhai Ambani Group (RADAG), listed at Rs.530 at the National Stock Exchange, a premium of about 18 percent. It, however, lost ground rapidly and has lost over 10 percent at the NSE in afternoon trade.

The firm had entered the capital market with an IPO of 260 million equity shares of Rs.10 each. The IPO was subscribed within a minute of its opening Jan 15.

It was oversubscribed 73 times when the IPO closed Jan 18.

In the meanwhile, however, Indian markets – in tandem with global peers – turned extremely volatile on fears of a US recession. The bellwether index has fallen by more than 18 percent since an all-time high of 21,206.77 points Jan 10.

The turbulence also derailed the two IPOs of Wockhardt Hospitals Ltd and Emaar MGF Land, forcing the companies to withdraw their offerings because of extremely poor response.

RPL’s stock opened the day at Rs.547.80 on the BSE and touched a high of Rs.599.90 before slumping to Rs.389 in the morning trading session.

It touched a high of Rs.530 in early trade on the NSE, but a huge sell off pulled it down to Rs.386 early in the morning session. It was trading lower at Rs.445.35, down Rs.4.65 or 1.03 percent by about noon.

Reliance Power is the flagship company of the RADAG to develop, construct and operate power generation projects. The company is currently developing 12 power projects with a combined planned installed capacity of 28,000 MW, one of the largest portfolios of power generation assets under development.