Reliance Power IPO sets world record $200 bn

Sunday, January 20, 2008

Reliance Power IPO sets world record $200 bn

It is unprecedented, even if you call it plain euphoria. Nowhere in the world has an initial public offer of shares by a new company evoked as much response as the Reliance Power issue that closed on Friday.

For a company that is yet to commence business or show income from operations, investors from across the world placed bids worth $200 billion for its shares worth $2.9 billion on offer. Retail investors put in 5.1 million applications for shares worth $47 billion or Rs 188,000 crore. Since as per rules, retail applicants can pay just a fourth of the total money initially, at least Rs 50,000 crore has been invested in the issue. For the sake of comparison, the collections are a fourth of the total direct tax collections for last year.

The overwhelming response for the issue is based on expectations that Reliance Power will be able to complete its 13 power projects in the next couple of years. The sale will increase the wealth of Anil Ambani, already India's third richest man after his Reliance Energy quadrupled in value last year. His wealth more than tripled last year to $45 billion, according to Forbes magazine, behind elder brother Mukesh Ambani and Lakshmi Mittal. On listing of REPL, there is speculation that Anil may replace Mukesh as the richest Indian.

That was the news part... What is happening here? I had told here about a speculated share market booooom :) But we found out something so extraordinary to call it a boom.

The market is sliding for the last five days, taking away all the buying power from the investors. Touchdown below 19,000 ? That is atrocious.

The retail sector was oversubscribed around 15 times (14.87 exactly). That means there is just one lot for each person who applied for 15 lots, 15 equity shares out of 225. The rest is going out to the public as refund.

So, around Feb second week, there will be money and only money in the market :)

As the grey market premium for the IPO is also falling reaching as low as Rs. 270, is there going to be a fall when the REPL market opens? We can wait and see...

I am hoping to get my lot of 15 REPL shares :)

Gud Day

See also...

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

Reliance Power IPO bidding starts tomorrow (15th Jan)

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