A lot of huulla is going on in the market regarding the IPO of Reliance Power. The issue has raised brows right from the day, it was announced by younger Ambani. Even SEBI has to look into the matter.
1. Promoters contribution to Reliance Power is US$ 250 million for 100% stake. 50% would be held by Reliance Energy and 50% that is US$125 million is contributed by Anil Ambani. Of this, around 10% would be off loaded in IPO i.e. US$ 25 million for US$ 2.5bn. This would lead to world's biggest investment appreciation of 100 times in 5 months from date of inception of the company. This would be India's biggest IPO ever, beating DLF.
2. The issue is trading in grey market at Rs. 400-Rs.420 i.e it would get list at around Rs. 850-Rs. 870 levels.
3. No project has been completed till date.
Surprisingly, I have not come across any expert recommending to bet on the issue.
I am not sceptical about the issue or the abilities of younger ambani, but it would have been a lot better if he would have completed some projects and then floated the company. I am sure the issue would be a great success and the the management would rope several JVs and ties up or even acquire expertise for execution.
So, surely listing would be at 100% premium.
My call is buy as much as possible.
Reliance Power has called an analyst's meet today i.e., Friday, 4th January 2008.
Venue: The Crystal Room, Hotel Taj Mahal.
Time: 6.45 pm.
Service: Cocktail & Dinner.
Will update on the issue after the analyst's meet.