Rel Power IPO has a big bang start, oversubcribed

The $3 billion Reliance Power IPO had a big-bang opening on Tuesday morning and the issue was oversubscribed 6.7 times at Rs 450 per share — the upper end of the price band — within hours of opening of its book building process.

Billed as India's largest initial public offer, the IPO is drawing huge response from investors. The Qualified Institutional Buyers or QIB portion has been subscribed 11.3 times with bids worth $17.6 billion. Most of the bids for the issue has come in at the upper band of Rs 450 per share

According to latest data available, the IPO received bids worth over Rs 40,000 crore in the first five minutes of the book-building process.

Over 228 million shares of the Anil Dhirubhai Ambani Group company are on offer in the country's largest-ever IPO with an estimated proceeds of Rs 11,700 crore.

The issue will close on January 18. The price band is between Rs 405-450 per share. The total issue size is of 260 million shares, including the promoters’ contribution of 32 million shares.

Over 30 per cent of this issue is reserved for retail investors with two payment options. Investors can pay in staggered installments or make a full payment upfront.

Retail investors have been also offered a discount of Rs 20 per share, which implies their net cost of subscription will be Rs 430 per share, if they choose to bid at Rs 450 per share.

Under the part payment option, retail investors have the option of putting in only Rs 115 per share upon application. The balance will be called upon, post the allotment of partly paid shares.

With a combined planned installed capacity of 28,200 MW, Reliance Power has one of the largest portfolios of power generation assets under development in India.

RELIANCE POWER PORTFOLIO

Reliance Power has a diversified portfolio of 13 medium and large-sized power projects, under development and strategically located at various places across India, the company had said in a statement.

With an installed capacity of 28,200 megawatts, the Reliance Power IPO will significantly contribute to reducing the demand-supply gap for the power in the country at competitive rates, it added.

The Anil Dhirubhai Ambani Group (ADAG) has announced plans to invest Rs 1,00,000 crore in the power business, while it is aggressively bidding for road projects and as well as in the transport sector. Group company Reliance Energy has bid for the Rs 50,000 crore Ganga Expressway Project in Uttar Pradesh.

It is also bidding for airports at Udaipur and Amritsar and is in the race for the ambitious Mumbai Trans Harbour Link project.

Kotak Mahindra Capital Company Limited, UBS Securities India Private Limited, ABN AMRO Securities (India) Private Limited, Deutsche Equities India Private Limited, Enam Securities Private Limited, ICICI Securities Limited, JM Financial Consultants Private Limited and JP Morgan India Private Limited are acting as the Book Running Lead Managers to the Issue whilst Macquarie India Advisory Services Private Limited and SBI Capital Markets Limited are acting as Co-Book Running Lead Managers.

Amarchand & Mangaldas & Suresh A Shroff & Co is advising the Company whilst Cleary Gottlieb Steen & Hamilton and J Sagar and Associates are advising the BRLMs and CBRLMs in relation to the Issue.