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The largest initial public offer (IPO) in the history of the Indian capital markets by Reliance Power Ltd (RPL), which opened for public subscription on Tuesday, has not just attracted record breaking demand by getting fully subscribed within a minute of its opening, but is likely to create an everlasting landmark in the IPO space.
With the opening bell at 9.55 am on Tuesday, the book-building IPO of RPL with a issue size of 22.80 crore equity shares offered for a price band of Rs 405 to Rs 450, was fully subscribed within 60 seconds.
By the day-end the demand graph on the two stock exchanges displayed that the issue had attracted bids for 239.75 crore equity shares, over-subscribed by nearly 10.52 times, worth around Rs 1.9 lakh crore.
RPL's initial share sale has surpassed the record set by Delhi-based property developer DLF Ltd, which raised Rs 9,200 crore last year.
The response was stupendous and serpentine lines were seen at all centres accepting forms.
Due to the heavy rush, the company on Tuesday decided to extend the timings to 9 pm on all days for the retail category.
On Wednesday, the second day of the IPO, till around 5 pm the issue had attracted bids for 315.88 crore shares on the NSE as against its size of 22.80 crore share, indicating subscription of 13.85 times worth over Rs 1.42 lakh crore. Total bids received at cut-off price stood at 16.89 crore shares.
According to figures, maximum demand on the first day came from Qualified Institutional Bidders (QIB), who are eligible to apply for shares by putting just 10 per cent of the amount required at the time of bidding.
According to market experts, by the time the issue closes on Friday, it is likely to attract a demand size in excess of Rs 2 lakh crore.
Speaking to this website's News Paper Kamlesh Agarwal, VP of A K Capital Services Ltd said: "On the first one or two days the maximum response comes from FIIs and depending on that the high networth and retail investors will apply.
Again on the last day, depending on the trend, the high networth investors and QIBs will push more applications. Looking at this scenario, we can say that the RPL IPO will comfortably raise over Rs 2 lakh crore."
The grey side of RPL
The RPL issue has stirred the grey market like never before. Grey market operators are like the bookies who bet on cricket, where nothing is legally on paper yet the trust is kept to the last penny lost or earned.
The prices in the grey also give a near-close indicative listing price of an IPO stock on the day it debuts on the exchanges.
It is estimated that the issue has already generated a volume of over Rs 500 crore in the grey markets, which are saturated mostly in some parts of Gujarat, Rajasthan and Mumbai.
According to a grey operator, the stock of RPL in the grey market was quoting at a premium of Rs 380, which is more than 80 per cent of the upper price band of Rs 450 a share.
This means a grey operator or a trader is ready to buy any expected allotment of one RPL share for a profit of 80 per cent to the upper band of the issue price.
Depending on these grey statistics the listing price of RPL is being estimated at Rs 900 to Rs 1100.
In the recent past, the biggest activity in grey market was seen in the IPO of Mundra Port & SEZ which also received resounding response with bids worth about Rs 2,00,000 crore and an over-subscription of 115 times. Source : newindpress.com |
