Apply aggressively : Reliance Power

Thebullishtrensd: Reliance Power is the first company comes from ADA Group into the IPO market. Reliance Power IPO subscribed by 24.36 times till yesterday night at 11PM.Promoters have taken 32 million shares at Rs.450 each while 228 million shares are offering to Indian public at Rs.450 but retail category will get shares with a discount of Rs.20, so they need to pay Rs.430 per share to the company.

Reliance Power plans to build the power plants across the India by using funds raised from the public and seeling it's stake in the firm which is 50% owned by Reliance Energy Ltd. At present Reliance Power doesnot have any power projects in operation. Reliance Power is developing the 13 power generation projects with the capacity of 28,200 MW but these power projects can be executed within 8 yrs of the time frame.

Out of total released shares staking 260-million will be offered to the public on a proportional basis to qualified institutional buyers (QIB) by at least 60 per cent of the net issue, while non-institutional bidders will get 10 percent and remaining 30 percent of the share will be issued to retail investors.Reliance Power Ltd will own 50 percent of the share while rest 50 percent will be diversified between the promoters of the ADAG, institutional buyers, non-institutional bidders and public.

The Credit rating agenciyCRISIL and ICRA have given four out of five points quoting that the fundamentals of the issue are above average in relation to other listed equity securities in India . The power sector is having huge demand-supply gap. According to a recent Central Electrical Authority report, demand for energy is expected to grow by eight percent annually in the five years to 2012. NTPC is having 27,904 MW capacity right now and it is having plans to increase it by 22,100 MW in the coming years. Incase of assured returns Reliance Power projects doesnot have any guranteed returns when it compared to NTPC it enjoys with assured returns. In the long run NTPC is having bright future compared to Reliane Power. Reliance Power has created the image among the Investors and Corporates after considering all parameters we suugested you to apply aggressively for Reliance Power IPO for better listing gains.

When it compared to its peer NTPC, the Govt sector PSU is having more advantages than Reliance Power. The market capitalisation when it compared to NTPC, Reliane Power will have large base at the higher price band of Rs.450.

Reliance Power IPO closes today we suggested you to apply for higher price band of Rs.450(Rs.430 incase you are a retail investor) for 225 shares. We suggested you to utilise the opportunity to apply in Part Payment Method which is convinient for you and you can utilise remaining balance for other IPOs we advise you to apply in retail category as we are expecting that HNI category will subscribe more than Retail Category.