RELIANCE POWER(IPO)

Reliance Power (RPL), part of the Reliance Anil Dhirubhai Ambani Group (R-ADAG) company,a unit of India's second-biggest utility by market value,is engaged in the construction and development of various gas- and coal-based thermal power projects and hydroelectric power projects in various parts of the country.

Reliance Power won rights to develop a 4,000-MW mega power project at Sasan in the central state of Madhya Pradesh in June. Its parent, Reliance Energy, is building a 1,200-MW power plant at Rosa in northern Uttar Pradesh state..

The 4,000-MW project is expected to be the largest pit-head coal-fired power project at a single location in the country and is scheduled to be commissioned during the XI Plan. At the same time, the company expects to complete the Rosa Phase-I, 600-MW coal-fired project in Uttar Pradesh, now under construction, by March 2010. The Rosa Phase II (600-MW expansion project) is scheduled to be commissioned by September 2010. The other identified projects are located in Western Region (12,220 MW), Northern region (9,080 MW) and North-Eastern region (2,900 MW). It is also making a big foray into the hydro power projects in Arunachal Pradesh. The power projects include six coal-fired projects (10,620 MW) to be fuelled by reserves from captive mines and supplies from India and abroad, two gas-fired projects (10,280 MW) to be fuelled primarily by reserves from the Krishna Godavari Basin off the East Coast and four hydro power projects (3,300 MW), three of them in Arunachal Pradesh and one in Uttarakhand.

Objects of the issue ;
Achieve the benefits of listing on the Stock Exchanges
Raise capital to fund subsidiaries to part-finance the construction and development costs of certain of 12 power generation projects currently under various stages of development.

General corporate purposes.

• Open - 15 Jan
• Close - 18 Jan
• Issue Type -100% Book Building Issue
• Issue Size - 1,300,000,000 Equity Shares Of Rs. 10 Each

Issue Price - Rs 405/- to Rs 450/- per Equity share
Maximum Subscription Amount for Retail Investor - Rs 100,000/-
Minimum and Maximum Order Quantity -
Listing - BSE, NSE
Lead Manager- Kotak, UBS, ABN AMRO, Deutsche, Enam, ICICI Securities, JM Financial and J.P. Morgan.
Registrar - Karvy Computershare Pvt Ltd
Phone - 040 2342 0815/ 0816
Email - reliancepower.ipo@karvy.com
Application Multiple - 15 and in multiples there off starting with atleast 15 shares
Cheque In Favour Of -
Reliance Power Payment Methods

RELIANCE POWER,ipo news
Reliance Power Listing to Charge Indian IPOs
BusinessWeek
- Jan 07, 2008
- 9 hours ago
Aside from the large size, the Reliance Power IPO also stands out because the company has no plants in operation yet. The first project (Rosa Phase I) is ...
Related Articles »
clipped from Google - 1/2008
Companies to mop up Rs 75000 cr in 2008
Economic Times
, India
- Jan 07, 2008
- 2 hours ago
The year, the study said, is likely to witness mega issues starting with Reliance Power’s Rs 10125 crore IPO. Other major issues which are expected to hit ...
Related Articles »
clipped from Google - 1/2008
Reliance Power will oversubscribe hopelessly
Moneycontrol.com
, India
- Jan 06, 2008
- 19 hours agoWhat’sa good way to approach Reliance Power? A: I don’t think everybody will get much allotment in the Reliance Power IPO, because it will be hopelessly ...

While Reliance Power may not be a stock for short-term investors to consider, the company is poised to get the Indian IPO market off to a good start this year. The greenfield power producer is seeking to raise between Rs105.3 billion and Rs117 billion ($2.7 billion to $3 billion), which will make it the largest Indian IPO evermdash;ahead of property developer DLF's $2.25 billion deal in June last year.
According to terms set last week, Reliance Power, which is a spin-off from Anil Ambani's Reliance Energy, will offer 260 million shares, or 11.5% of the company, at a price of Rs405 to Rs450 per share. The deal, which was delayed from the fourth quarter last year after investor complaints about Reliance Energy's transfer of certain high-value power projects to the listing vehicle, will be open for subscription from January 15 to 18. The Indian regulators dismissed the complaints late last year.
To help ensure a successful outcome of such a large sale, the promoters will buy 32 million of the shares, or 12.3% of the deal. Retail investors will be able to buy the shares at a Rs20 per share discount to the price paid by institutional investors and high-net-worth individuals. Depending on the final price, the discount will range from 4.4% to 4.9%. Unusually, retail investors also won't have to pay the entire subscription amount when submitting their orders, but can choose to divide the payments into two parts with the balance to be settled only after they know how many shares they will receive. This could make some investors more inclined to subscribe.
Aside from the large size, the Reliance Power IPO also stands out because the company has no plants in operation yet. The first project (Rosa Phase I) is due to start generating power and revenues in December 2009 with the other 12 plants scheduled for completion at a staggered pace until April 2016. As a result, the execution risk is much greater than for a typical IPO and it will require a big leap of faith from the investors to raise the cash that is needed to see these projects through.
Analysts note that the 600MW Rosa Phase I plant is the only one that will have even begun construction at the time of listing and, for some of the projects, the company doesn't yet hold the required land. In its preliminary listing prospectus, the company acknowledges that its power projects have a long gestation period and says it cannot assure that they will commence operations as expected.
"The completion targets for our projects are estimates and are subject to risks, including, among other things, contractor performance shortfalls, unforeseen engineering problems, force majeure events, unanticipated cost increases or changes in scope and delays in obtaining certain property rights, fuel supply and government approvals, any of which could give rise to delays, cost overruns or the termination of a project's development," it states.
"The IPO is quite dicey and people will be putting money into it solely on the reputation of the group," says one India-based analyst.
That reputation counts for a lot though and the deal is widely expected to be well received by the market amid a perception that Anil Ambani will make sure people won't lose money on this spin-off. They are also counting on the family's contacts and negotiation skills when it comes to removing various road blocks and making the necessary headway to realise the plans.
Meanwhile, the company and its eight bookrunning lead managers stress the fact that the power plant under development will make Reliance Power one of the largest power generators in India, and no other company will be able to show the same rapid growth rate in the coming seven to eight years. The assets will also be well-diversified, both geographically and in terms of fuel sources, and will be strategically located near its potential customers in the northern, western and north-eastern regions of the country as well as near its fuel sources or load centres.

Reliance Power IPO has 2 Payment Methods

The Payment Methods available to investors to apply in this Net Issue are as follows:

1) Payment Method - 1

• a) Only Retail Individual Bidders and Non-Institutional Bidders are eligible for this method QIBs cannot submit a Bid under this Payment Method.
• b) While bidding, the Bidder shall make a payment of Rs. 115 per Equity Share, irrespective of the Bid Price. Investors should note that the total Bid Amount will be used to determine whether a Bid is in the Retail Individual category, Non-Institutional category or not, and not the amount payable on submission of Bid-Cum-Application Form.
• c) At the time of allotment: 1. If the amount paid by the Bidder is equal to or higher than the total amount payable (being the Issue Price multiplied by the number of shares allotted) by the Bidder on the Equity Shares allotted to the Bidder, we reserve the right to adjust the excess amount towards the Balance Amount Payable and issue fully paid Equity Shares only. The excess amount, if any, after adjusting the Balance Amount Payable shall be refunded to the Bidder (i.e., Refund = Total amount paid on bidding minus the total amount payable on the shares allotted). 2. If the amount paid by the Bidder is less than the total amount payable by the Bidder (being the Issue Price multiplied by the number of shares allotted) on the Equity Shares allotted to the Bidder, we reserve the right to adjust the excess of the amount received from the Bidder over the Amount Payable on Submission of Bid-cum-Application Form towards the Balance Amount Payable and issue a Call Notice for the balance.

2) Payment Method 2

• a) Bidders under any category can choose this method.
• b) While bidding, the Bidder shall have to make the full payment (Bid Amount multiplied by number of Equity Shares bid) for the equity shares bid. Bidders in QIB category will be required to make payment of 10% of the Bid Amount multiplied by the number of Equity Shares bid, with the balance being payable on allocation but before allotment.

Emotions, high energy and a hard sell all intact as Anil Ambani hits the press once again and the marathon runner is in an all talk mode about the country's largest public offering (IPO).

Reliance Power Ltd, the Anil Dhirubhai Ambani Group (ADAG) firm, is set to hit the capital market by early next month, raising close to $3 billion in the country’s largest IPO.

So if you are confident to invest your money in shares of a company which is yet to be put up or make money but have his brand ADAG then Reliance Power could be your big bet.

For the first time, you will get a 5 per cent discount on an IPO from a power company. You will have to pay only Rs 115 on application with the balance to be paid later on when you get the allotment.

Retail investors get discount

So on a price band of Rs 400 to Rs 450, the retail investors will get to buy the stock at Rs 20 less and will not need to block too much money at the time of applying.

So will there be enough returns on your investments specially since power is not the most high yielding business but if you believe the younger Ambani you should not be worried.

Anil Ambani is being backed by the country's top three merchant bankers, all domestic, who feel power stocks could define the stock markets in 2008.

"Reliance Power IPO is coming at a time when markets at all time high to impress retail investors. But the fact is that they are diluting only 10 per cent, so it may be only a few lucky ones who get a say,” said Nimesh Kampani, Chairman, JM Financial.