Anil Dhirubhai Ambani Group company Reliance Power Ltd on Friday announced plans to raise a maximum, of Rs 10,260 crore from the public. With the promoters bringing in Rs 1440 crore the total issue size stands at Rs 11,700 crore.
This could be the largest ever public offering of equity shares, beating DLF's float of around Rs 9600 crore, if it gets subscribed toward the higher end of the price band. The price band for the book building is Rs 405 to Rs 450 for every fully paid up share of Rs 10 each. The largest initial public offer (IPO) in the Indian market opens for subscription on January 15 and is likely to be listed on the bourses by first week of February.
Asked about the ongoing tussle with Reliance Industries related to supply of gas for his power projects, Anil Ambani said, "India will be long on gas in the medium to long term with all the gas discoveries and we have a lot of companies willing to supply to us."
"With a strong demand for the issue we decided not to make any pre IPO placement or any preferential allocation," said Vallabh Bhansali, Enam Securities, one of the lead managers to the issue. Of the total 260 million shares offered to the public, at least 60 per cent of the net issue will be allocated on a proportional basis to qualified institutional buyers (QIB), 10 per cent will be available for non-institutional bidders and 30 per cent to retail investors.
The total issue constitutes 11.1 per cent of the post-issue paid-up capital of the Company. Reliance Energy, part owner of Reliance Power would hold 45 per cent stake in the company post-issue. Money raised from the issue would go to part-finance 13 medium to large sized power projects.
Credit rating agencies CRISIL and ICRA have given 4/5 for the issue indicating above average fundamentals. The issue underwent a few changes from the time it filed its first draft prospectus in October. The company had intended to split the paid-up value and issue Rs 2 paid up shares.