Reliance Power IPO creates history

Reliance Power’s Rs 11,600-cr issue oversubscribed in a minute. Are you looking at India’s richest man? BS Srinivasalu Reddy reports.

Tuesday, 9.55 am: The Anil Ambani-controlled Reliance Power opens for stock subscription in the Rs 405-Rs 450 range.
9.56 am: History is created — the stock is oversubscribed. By evening the Rs 11,600-crore issue is oversubscribed a staggering 10.55 times. And it’s still three days to go before subscriptions close.

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Reliance Power is by far the largest initial public offering ever in India, dwarfing realty major DLF’s Rs 9,188-crore issue.

Reliance Power, when it lists on the stock exchange, is likely to substantially raise Anil’s personal wealth. If the stock lists above Rs 700, as it is widely expected to do, it would catapult Anil to the top of India’s rich league, well past elder brother Mukesh’s Rs 2.48 lakh crore net worth.

But there’s more to the share issue than that. Reliance Power is representative of a whole a new league of mega public offerings in India. The DLF offering was considered a paradigm-changing one. Within seven months, Reliance Power makes it seem like a drop in the ocean.

Meanwhile, State Bank of India is planning to issue shares worth Rs 16,700 crore to existing shareholders at a fixed price. This, too, will dwarf Reliance Power’s issue. No wonder then, Union Finance Minister P. Chidambaram couldn’t contain his elation. “It is a reflection of what the world community thinks about the future of India...,” he said about Reliance Power, the first time he has commented on a public issue.

Other mega issues expected soon are Reliance Infocomm, Oil India, UTI Mutual Fund, National Hydro Power Corporation and Rural Electric Corporation.