Reliance Power IPO bidding starts tomorrow (15th Jan)

Tuesday, January 15, 2008

Reliance Power IPO bidding starts tomorrow (15th Jan)

The IPO has started off a great wave in the stock market and the society itself. The recent boom have attracted people from all fields to shares. Now, we have the biggest IPO launch in the history of share market, worth around 10 thousand crore rupees :-O

More than a lakh demat accounts are being created just for the IPO. Are we looking at a great share market booooom...

It is sure that the IPO will be oversubscribed more than 10 times. So, may luck be with you :)

Listing date is expected to be in FEB 2008.

The total value of Reliance Power IPO, according to market expectations, would be more as the proceeds would be used to fund a total of 12 power projects with a total installed capacity of 24,200 MW. The investment envisaged for the projects is nearly Rs 1 lakh crore.

Reliance Power Limited

Symbol - SeriesRPOWER EQ
Issue PeriodJanuary 15, 2008 to January 18, 2008
Issue Size 228,000,000 Equity Shares (excluding Promoters contribution of 32,000,000 equity shares)
Issue Type100% Book Building
Face ValueRs. 10/-
Price RangeRs. 405 TO Rs. 450
Tick SizeRe. 1/-
Market Lot15 shares
Minimum Order Quantity15 shares
Maximum Subscription Amount for Retail InvestorRs.100000

The peculiarities of RPOWER IPO are multiple payment options, 5% discount for retail investors ...

1. Payment Method - 1 (Partial payment option)

Even though the issue price of the Reliance Power Limited IPO is in between of Rs 405 to Rs 450 per equity share, investor are all allowed to pay a partial amount Rs 115 Per Equity share at the time of bidding.

Below are few facts and highlights of partial payment option:

1. Only Retail Individual Bidders and Non-Institutional Bidders are eligible for this method QIBs cannot submit a bid under this Payment Method.

2. While bidding, the Bidder shall make a payment of Rs. 115 per Equity Share, irrespective of the Bid Price. Investors should note that the total Bid Amount will be used to determine whether a Bid is in the Retail Individual category, Non-Institutional category or not, and not the amount payable on submission of Bid-Cum-Application Form.

3. At the time of allotment:
* If the amount paid by the Bidder is equal to or higher than the total amount payable by the Bidder on the Equity Shares allotted to the Bidder, company reserve the right to adjust the excess amount towards the Balance Amount Payable and issue fully paid Equity Shares only. The excess amount, if any, after adjusting the Balance Amount Payable shall be refunded to the Bidder (i.e., Refund = Total amount paid on bidding minus the total amount payable on the shares allotted).
* If the amount paid by the Bidder is less than the total amount payable by the Bidder on the Equity Shares allotted to the Bidder, company reserve the right to adjust the excess of the amount received from the Bidder over the Amount Payable on Submission of Bid-cum-Application Form towards the Balance Amount Payable and issue a Call Notice for the balance.
* The notice of the Balance Amount Payable will be published in two widely circulated newspapers (one each in English and Hindi) and a regional newspaper along with the statutory advertisement for the Basis for Allotment.

4. Equity Shares in respect of which the Balance Amount Payable remains unpaid may be forfeited, at any time after the Due Date for Balance Amount Payable.

Partial payment options advantages and disadvantages:
1. If the amount paid is less then the total amount of shares allocated, the allocated shares will remain locked until investor pays the balance amount. This means investor may not sell the shares on listing day and get benefited from listing day gains.
2. There will not be any difference in share allocation process for different payment type. All the valid application received will be considered for IPO Allotment irrespective of payment type chosen.

In a nutshell, you can bid for 1 lakh rupees by paying only Rs. 25875/- ( 115 bid amount * 225 equity shares ) at first, isn't it a way to profit :) I am going to do exactly that :)

Also, 450 * 225 = 101250. But, Retail Investors can bid for 225 shares, coz. of the 5% discount ;)

If one looks at the grey market pulse for the retail category, the IPO is expected to list at Rs. 800-900 per share. The retail issue will be subscribed 4-6 times. If that is the case, then retail investors are expected to get between 38-45 shares, with a minimum lot of 15 shares as per the IPO prospectus.

2. Payment Method - 2 (Full payment option)

This is the standard method of bid payment where investor pay full amount at the time of submitting the bid.

Below are few facts and highlights of this payment option:

1. Bidders under any category can choose this method.

2. While bidding, the Bidder shall have to make the full payment (Bid Amount multiplied by number of Equity Shares bid) for the equity shares bid. Bidders in QIB category will be required to make payment of 10% of the Bid Amount multiplied by the number of Equity Shares bid, with the balance being payable on allocation but before allotment.

Happy Bidding ...

See also...

Reliance Power IPO sets world record $200 bn

Reliance Power IPO bid details

Reliance Power IPO Subscription status update

Rel Power IPO subscribed 73x; gets bids of Rs 7.5 lk cr

Rel Power IPO subscribed 23x; gets bids of Rs 2.34 lk cr

Reliance Power will go a long way, says experts

Electrifying response to Rel Power IPO, subscribed 14x

Rel Power IPO subscribed 10.5x; receives bids of $ 27.5 bn

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