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Anil Ambani and his energy flagship Reliance Energy Ltd have put in Rs 1,440 crore as promoters' contribution to the initial public offering of shares in group arm Reliance Power, the company said in a release on Monday. This works out to a subscription price of Rs 450 a share, at upper end of the price-band.
The issue opens on Tuesday and will close on January 18. The price-band has been set at Rs 405-450 per share. The offering is expected to mop up between Rs 10,700 crore and Rs 11,700 crore from the market. Many bankers see demand exceeding Rs 200,000 crore from the issue of a total of 260 million shares. Of this, 228 million shares have been earmarked for public and the promoters' share has been pegged at 32 million shares.
Retail investors have been offered a discount of Rs 20 per share. This means the net cost of subscription will be Rs 430 per share, if bid at Rs 450 per share. Retail investors also have the option of making part payment of the application amount, wherein they will have to put in Rs 115 per share while seeking allotment. The balance will be asked for after the allotment of the shares.
With a planned installed capacity of 28,200 mw, Reliance Power has one of the largest portfolios of power generation assets under development in India. Most of the money from IPO is expected to be used to fund the 4,000 mw Sasan project which Reliance Power bagged after Lanco's bid was disqualified.
The company will need between Rs 16,000 crore and Rs 20,000 crore for this project. Besides, Reliance Power is working on adding new capacities to take its total to 28,200 mw over time.
At last count, Anil's group firms had a market capitalisation of over Rs 200,000 crore. The group has a net worth of about Rs 40,000 crore, cash flow of Rs 9,000 crore, net profit of Rs 5,000 crore and zero net debt. If issue is successful, parent company's market capitalisation could test $20 billion levels.
Kotak Mahindra, UBS Securities, ABN AMRO Securities, Deutsche Equities, Enam, ICICI Securities, JM Financial and JP Morgan are lead managers to the issue. Source : timesofindia.indiatimes.com |
