MUMBAI (Reuters) - Indian shares rose 0.12 percent in choppy trade on Monday, led by top infrastructure play Larsen & Toubro, while Reliance Power Ltd gained on its plans to issue bonus shares after a poor debut last week.
Reliance Power said its board would meet on Feb. 24 to consider issuing bonus shares to its shareholders excluding owners, with an aim to reduce the cost of its shares which had tumbled since their debut on Feb. 11.
Reliance Power, which raised a record $3 billion in India's largest-ever share sale, rose as much as 11.7 percent to a high of 429.60 rupees. The issue price of the shares was 450 rupees, although retail investors only had to pay 430 rupees.
"First and foremost, it is a tacit acceptance of the fact that the issue was overpriced to begin with," said V.K. Sharma, head of research at Anagram Stock Broking Ltd.
"Bonus issues normally don't add value as the market tumbles post bonus to account for the new issue, but in this case, as the promoters do not get any bonus, the gains will not vanish," he said.
By 10:17 a.m. or (0447 GMT), the benchmark BSE 30-share index was up 21.8 points at 18,137.08, with 18 components in the positive territory. It had opened up 0.6 percent, but also slipped into negative territory during early trade.
The index, which gained 3.7 percent last week, is 14.5 percent below a record 21,206.77 hit on Jan. 10.
In the broader market 1,376 gainers beat 445 losers on a low volume of more than 46 million shares.
Shares in Reliance Energy, which owns 45 percent of Reliance Power, rose 2 percent to 1,743.70 rupees and those in top power producer NTPC Ltd gained 2.2 percent to 208.45 rupees.
Reliance Power said its board would meet on Feb. 24 to consider issuing bonus shares to its shareholders excluding owners, with an aim to reduce the cost of its shares which had tumbled since their debut on Feb. 11.
Reliance Power, which raised a record $3 billion in India's largest-ever share sale, rose as much as 11.7 percent to a high of 429.60 rupees. The issue price of the shares was 450 rupees, although retail investors only had to pay 430 rupees.
"First and foremost, it is a tacit acceptance of the fact that the issue was overpriced to begin with," said V.K. Sharma, head of research at Anagram Stock Broking Ltd.
"Bonus issues normally don't add value as the market tumbles post bonus to account for the new issue, but in this case, as the promoters do not get any bonus, the gains will not vanish," he said.
By 10:17 a.m. or (0447 GMT), the benchmark BSE 30-share index was up 21.8 points at 18,137.08, with 18 components in the positive territory. It had opened up 0.6 percent, but also slipped into negative territory during early trade.
The index, which gained 3.7 percent last week, is 14.5 percent below a record 21,206.77 hit on Jan. 10.
In the broader market 1,376 gainers beat 445 losers on a low volume of more than 46 million shares.
Shares in Reliance Energy, which owns 45 percent of Reliance Power, rose 2 percent to 1,743.70 rupees and those in top power producer NTPC Ltd gained 2.2 percent to 208.45 rupees.
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