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Thursday, October 04, 2007

Reliance Power to offload 10.1% stake via IPO

Reliance Power (RPL), part of the Reliance Anil Dhirubhai Ambani Group (R-ADAG) company, will offload a 10.1% stake in the proposed initial public offering (IPO). According to the draft red herring prospectus (DRHP) filed by RPL with the stock market regulator SEBI on Wednesday, the IPO will comprise 130-crore equity shares of Rs 2 each for cash at a premium to be decided through a 100% book building process.

The proceeds of the issue are proposed to be utilised for funding various projects. Reliance Power, currently a subsidiary of Reliance Energy (REL), has got two projects under its fold — a 4,000 mw Sasan ultra mega power project and a 1,200 mw Rosa project.

On Wednesday, the share price of REL moved up 7.5% to close at Rs 1450.40 on BSE. The public issue includes promoters’ contribution of 16 crore shares, and the balance 114 crore shares would constitute the net issue to the public. The issue will constitute 11.5%, and the net issue will constitute 10.1% of the post-issue paid-up equity capital of the company.

“At least 60% of the net issue to the public will be allotted on a proportionate basis to qualified institutional buyers (QIBs), of which 5% will be available for mutual funds. Around 30% of the net issue will be available for allocation on a proportionate basis to the retail individual bidders and 10% will be available for allocation on a proportionate basis to non-institutional bidders,” RPL said in a statement.

The equity shares of the company are proposed to be listed on BSE and NSE. Kotak Mahindra Capital, UBS Securities India, ABN Amro Securities (India), Deutsche Equities India, Enam Securities, ICICI Securities, JM Financial Consultants and JP Morgan India are acting as the book running lead managers to the issue.

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