Allotment, Refund Issues Plague Reliance Power Investors

MUMBAI: Even as the board of Reliance Power meets on Sunday to consider a bonus share issue, there are cases of investors not having got the shares allotted to them or the refund money even 10 days after the stock listed on the exchanges on February 11.

One investor wrote in to say he was as yet unsure if he has been allotted the shares. Neither has he received the refund money.

Karvy Computershare, registrar to the mega issue, had a different reason every time the investor called in to know the status. Initially he was told he was allotted the shares and it would take a few days to get transferred to his account. Failing which, he was told his application was “suspect and put on hold.” He received a further shock when a call center executive told him his cheque had bounced.

Upcoming IPOs look overpriced compared to their listed peers

Once the basis of allotment is decided, which was February 1 in the case of R Power, the shares in an IPO need to be credited to the applicants within two working days.

Another applicant was told that his refund money was sent as a cheque via registered post on Feb 9. However, the local post-office personnel said they had received no such letter.

On being contacted, a Karvy official said that around 2 per cent of the total applications or 1,00,000 applications were on hold for various reasons.

According to SEBI officials, in the past one week they had received over 1,800 complaints and had flagged off the company on them. In reply, company officials said all the grievances would be resolved in next 10-15 days. The company is expected to come out with a report on the status of allotment and refund next week.

Reliance Power Asks Shareholders To Make Balance Payment

MUMBAI: Anil Ambani Group company Reliance Power on Wednesday said it has asked shareholders to make balance payment by February 26 on shares alloted to them in the IPO to be eligible for bonus shares.

"The balance amount was due on allotment and a notice for the same has been sent to shareholders to make the balance payment on or before February 26," Reliance Power said in a filing to the Bombay Stock Exchange.

By issuing the notice, the company has complied with SEBI guidelines, and all shares have been made fully paid up, Reliance Power added.

Reliance Power's IPO had offered a discount to retail investors, and an option of staggered payment to all segments.

Qualified institutional buyers were allowed to pay only 10 per cent initially, while high net worth individuals and retail investors were permitted to pay only 25 per cent of the total cost as initial payment. The remaining amount was to be paid after allotment of shares.

On February 17, the company had announced it was planning a bonus issue to all shareholders, except promoters, in a bid to compensate them for the losses they suffered on the day of listing of the scrip. The Reliance Power Board is scheduled to meet on February 24 to consider the issue.

According to the filing, in those cases where the balance amount remains unpaid after the stipulated date, "Reliance Power would keep the bonus shares in abeyance and the same shall be given to the respective holders upon receipt of call money".

The record date for the bonus shares shall be fixed in consultation with stock exchanges and in compliance with provisions of the listing agreement, Reliance Power added.

Shares of Reliance Power were trading at Rs 408.50, down 1.16 per cent, on BSE in the morning trade.

Sensex Edges Up, Reliance Power Gains

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.

Blame It On Global Meltdown, Says Reliance Power

MUMBAI: Reliance Power expressed disap-pointment at the listing of its stock on Monday and blamed it on the global capital market meltdown of the past three weeks. “From the time of the IPO, the Sensex is down 17%, while the Reliance Power stock is down 17% from the IPO price.

A very large number of pivotals, including RIL, ONGC, NTPC, DLF, ICICI Bank, Bhel and L&T have actually all declined in a much larger range of 20-40%,” a R-Power spokesperson said. R- Power, which had raised $2.9 billion, had a poor stock market debut. It listed at a discount to the IPO price and suffered a 17% fall to end at Rs 372.50. The performance comes in the backdrop of a huge meltdown in stock markets globally.

The spokesperson said R-Power suffered a much smaller erosion in value of about Rs 1,700 crore compared with others . “The stock has simply been marked-to-market for the decline on the single day of listing,” the spokesperson said. “We remain confident of delivering superior long term returns to our over four million shareholders on their in-vestments in the R-
Power IPO,” the spokesperson added.

Equities Seen Flat-To-Higher On Positive Global Cues

MUMBAI: After a day of utter pandemonium on Dalal Street, the market looks at positive global cues Tuesday to offer some solace. Wall Street finished higher in a volatile session on Monday as retail and homebuilders stocks rose on expectations for more interest rate cuts, but banks and insurers fell on worries about further mortgage debt troubles. The Dow rose 0.48 per cent to 12,240.01, Standard & Poor's 500 Index rose 0.59 per cent to 1,339.13 and the Nasdaq Composite Index rose 0.66 per cent to 2,320.06.

Asian shares edged higher with Japan’s Nikkei up 0.12 per cent, Hong Kong’s Hang Seng gaining 1.65 per cent and Singapore’s Straits Times rising 1.22 per cent. On Monday, Indian shares plunged weighed by the weak debut of Reliance Power battering already cautious sentiment firmly down.

National Stock Exchange's Nifty ended at 4857, down 5.14 per cent or 263.35 points after swinging 323 points during the day. The index touched a high of 5,126.40 and low of 4,803.60.

Bombay Stock Exchange's Sensex closed at 16,630.91, down 833.98 points or 4.78 per cent. The index swung over 969 points intraday between a high of 17,427.34 and low of 16,457.74. Foreign institutional investors were net sellers of equity worth Rs 1,268.67 crore, while mutual funds net sold Rs 22.27 crore of equity, according to provisional data on NSE.

Reliance Power IPO subscribed 5.36 times

MUMBAI: The initial public offering of Reliance Power promoted by Anil Ambani got over-whelming response in the primary market. According to sources, the 26 crore issue was subscribed 5.36 times at the higher price band of Rs 450 in just few minutes of issue opening.

According to an official familiar with the book building process, the IPO has been subscribed 5.36 times. BSE-NSE combined issue has received bids for 55,000 crore shares.

The company has come out with an IPO in the price band of 405-450 per share. The issue opened today and will close January 18.

At the lower end of the price band the company would raise Rs 10,530 crore and at the higher price band it would garner Rs 11,700 crore.




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As per the NSE website, till 10:10 am, IPO was subscribed 1.48 times in 10 minutes of the issue opening. The 22,80,00,000 share offering has received 33,67,74,330 bids. Total bids received at cut-off price were 45,015.

Retail investors have been offered a discount of Rs 20 per share, which implies their net cost of subscription will be Rs 430 per share, if they choose to bid at Rs 450 per share. Retail investors also have the option of making part payment of the application monies, wherein they will have to put in only Rs 115 per share upon application. The balance will be called upon, post the allotment of partly paid shares.

Rating agency Crisil assigned an above average 4-on-5 rating to the proposed initial public offer of Reliance Power. ICRA has assigned IPO Grade 4, indicating above average fundamentals, to the IPO. ICRA assigns IPO grading on a scale of 5 to 1, with Grade 5 indicating strong fundamentals and Grade 1 poor.

Kotak Mahindra Capital Company Limited, UBS Securities India Private Limited, ABN AMRO Securities (India) Private Limited, Deutsche Equities India Private Limited, Enam Securities Private Limited, ICICI Securities Limited, JM Financial Consultants Private Limited and JP Morgan India Private Limited are acting as the Book Running Lead Managers to the Issue whilst Macquarie India Advisory Services Private Limited and SBI Capital Markets Limited are acting as Co-Book Running Lead Managers.

Amarchand & Mangaldas & Suresh A. Shroff & Co. is advising the Company whilst Cleary Gottlieb Steen & Hamilton and J. Sagar and Associates are advising the BRLMs and CBRLMs in relation to the Issue.