Riding a surge of investor interest, Reliance Power's initial public offering attracted 800 billion rupees ($20.37 billion) worth of bids in the first two hours of trading.

The Mumbai-based company's offering was oversubscribed 7.6 times on the Bombay Stock Exchange and National Stock Exchange, according to market sources. Billionaire Anil Ambani's company had expected to raise $3 billion, making it the largest such issue ever on the Indian bourses.

The issue closes on Jan. 18. Reliance Power is selling 260 million shares at 405 rupees ($10.31) to 450 rupees ($11.46) each.

Parent company Reliance Energy (other-otc: RELFF - news - people ), India's second-largest electricity business by market value, was down 0.3% on the Bombay Stock Exchange, at 2,468 rupees ($62.84) in midday trading. Last year, the stock quadrupled in value, making it the star performer on the benchmark 30-stock Sensex.

Reliance Power is the first Indian power company to tap the markets this year, at a time when the sector is seeing a spurt in investments. The government, which has a goal of power for all by 2012, estimates it will need an investment of $500 billion over the same period for infrastructure—roads, ports, airports and power generation. India's electricity shortfall amounts to around 13% during peak hours.

Ratings agency CRISIL, the Indian arm of Standard and Poor's assigned the Reliance Power IPO an above-average rating, saying strong demand for power would benefit early movers like Reliance Power. But Morgan Stanley downgraded Reliance Energy to "underweight": "The key reason for the downgrade is the valuation of Reliance Power, which we value at $11.85 billion, while Reliance Energy stock seems to be discounting the value of Reliance Power at $23-25 billion (on the IPO price band)," Morgan said in a note to clients Monday. The primary risks for Reliance Power, it observed, are "execution delays and continued ambiguity on gas supplies necessary for firing over 10,000 mega watts of capacity."

Indian companies are expected to raise $15.8 billion from 35 issues in initial public offerings this year, according to Thomson Financial. The figure is almost double the IPO proceeds raised in India in 2007--$8.3 billion from 91 issues. Real estate firm DLF set a record last year when it raised $2.7 billion in an IPO. India is ninth most active global IPO issuer, with an overall market share of 2.7% in 2007.