Date:04/10/2007 URL: http://www.thehindubusinessline.com/2007/10/04/stories/2007100451700300.htm

Back Reliance Power files IPO papers; face value of share Rs 2

Our Bureau

Mumbai, Oct. 3 Reliance Power Ltd proposes to sell 130 crore shares with a face value of Rs 2 each in its initial public offering.

The company, a subsidiary of Reliance Energy, filed its Draft Red Herring Prospectus with SEBI on Wednesday, a news release said.

The issue will constitute 11.5 per cent of the company’s equity capital. It includes a promoters’ contribution of 16 crore equity shares which would be allotted at the IPO price, the release said.

The remaining 114 crore shares will constitute the net issue to the public. The net issue will constitute 10.1 per cent of the post-issue paid-up equity capital of the company.

The IPO price will be at a premium which will be yielded through a 100 per cent book building process.

At least 60 per cent of the net issue will be allotted to Qualified Institutional Buyers (of which 5 per cent will be for allocation to mutual funds only), at least 30 per cent to retail individual bidders, and 10 per cent to non-institutional bidders.

Fund for Sasan

Reliance Power has bid for and won the 4,000-MW ultra mega power project in Sasan. The company is raising funds for the project through the IPO.

The Sasan project’s cost will be upwards of Rs 16,000 crore. Going by the debt-equity ratio of power projects, market watchers said they expect the IPO to be in the range of Rs 8,000-10,000 crore.

Reliance Energy’s stock price rose by 7.48 per cent or Rs 101 on Wednesday, closing at Rs 1,450.40 on BSE.