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Friday, January 18, 2008

Reliance Power IPO

On January 15 the public issue of Reliance Power (Anil Dhirubhai Ambani Group) opened and oversubscribed 10.2 times on same day which is a historic in Indian share market history. I hope that it will be oversubscribed 50 times by its last date i.e. 18th January 2008 because peoples are selling their existing holding in big quantities to invest money in this IPO and the BSE sensex and Nifty sensex is going down continuously.

All over the country peoples are opening demat account in large number as it is necessary to have a De-Mat account for bidding in IPO. Reliance is issuing 26 crores shares in this price bank of Rs.405-Rs.450 with a discount of Rs.20/- per share. Company has spent a lot of money and using various methods for advertisement of this IPO. From Mumbai dabbawalas (Sex Sigma rated) to TV channels everywhere company is giving ads.

The grey market sources said that the price of share after listing will be approx. Rs.900 although it is not a reliable information but looking at the history of reliance group one can definitely rely on the goodwill of company. Company has around 13-14 power projects based on coal, gas and hydroelectric.

If we look at the power sector, it has great potential and all the shares of power sector companies like NTPC, Power Grid etc. are performing well.

Even many mutual fund companies are planning to launch their new offering immediately after the Reliance Power IPO in a hope that the refund sent to bidders may be attracted for their funds.

Please provide me your views for this IPO.

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