Reliance Power IPO raises $3 billion within a minute
15 January 2008
Mumbai: Within a minute of its opening, the Reliance Power IPO was oversubscribed by four times, raising $3 billion in under sixty seconds. The stock sold represents 10 per cent of the company, now valued at $30 billion.
''In a New York minute, everything can change,'' goes the line from a popular 'Eagles' song titled 'New York Minute', and featured in their hit album, 'Hell freezes over.'
Anil Ambani might just be humming that tune, having created a history of sorts at the Indian bourses by raising $3 billion for his Reliance Power IPO in the first sixty seconds of the issue opening to subscribers. Apparently, the Ambani name still holds the charisma, and money-spinning capability that it did decades ago when Dhirubhai Ambani went to the markets to raise finances for Reliance Textiles.
By the close of the day, the National Stock Exchange (NSE) statistics showed the issue had been oversubscribed 10-and-a-half times.
The strong demand shown for India's largest IPO yet will practically ensure that the 10.1 per cent stake in Reliance Power would come to market at or around Rs450 rupees per share, which is the top end of the IPO's price band.
Speculation in the bull market has brokers and analysts foreseeing the stock listing at almost double of the offer price, given the strong demand as shown by the under-a-minute oversubscription. That would value Reliance Power ahead of the National Thermal Power Corporation, which has 28,000 megawatts of proven and operating plants, and another 50,000 megawatts on its drawing boards for the next 10 years.
Reliance Power is looking to build power plants across the country, by using funds raised by selling the stake in the firm, which is half owned by Reliance Energy Ltd.