Pre-closing: Sensex falls 416 pts, Rel IPO oversubscribed

The Sensex drops to 20,311.66 in pre-close trading as mkt players and investors encash their holdings to invest in Reliance Power's IPO.

Stock market barometer Sensex fell nearly 416 points in pre-close trading as some market players and investors encashed their holdings to invest in Reliance Power's mega public issue that opened for subscription today.

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The Sensex dropped 416.39 points at 20,311.66 at 1500 hours. Reliance Power's initial public offer was subscribed nearly 10-times on the first day of its opening.

The Anil Ambani group's IPO generated a demand of close to Rs 100,000 crore within four hours of start of the book building process. According to the latest data available, the IPO received bids for over 220 crore shares as against 22.80 crore shares on offer.

Brokers said market players as well as the general public opened new demat accounts to invest in the issue. They said most of the investors sold their existing holdings in the secondary market to apply for the public offer.