Tuesday, October 16, 2007

Reliance Powe IPO - Wait for it !!

Reliance Power proposes to come out with an IPO of 160 Crore shares of face value of Rs 2 per share. The premium has still not been decided but the grey market in the Ahmedabad is already quoting a premium of Rs.25 for over the IPO price (which is yet to be decided). The application premium in the grey market is at Rs.4000 per Rs.1 Lakh of application. The issue size is 130 Cr equity shares of Rs.2 each at face value by 100% book built. The IPO is expected around diwali time.

Their projects include funding for which will be done from the proceeds of the IPO:

• Rosa Phase I, a 600 MW coal-fired project in Uttar Pradesh which is currently under construction and scheduled to be commissioned in March 2010.

• Rosa Phase II, a 600 MW expansion of Rosa Phase I which is scheduled to be commissioned in September 2010.

• Butibori, a 300 MW coal-fired project which will supply power to a group of industrial consumers in Maharashtra and is scheduled to be commissioned in June 2010.

• Sasan, one of the first UMPPs promoted and awarded by the Government of India. This 3,960 MW supercritical coal-fired power project is expected to be the largest pithead coal-fired power project at a
single location in India and in accordance with the terms of the PPA, it is scheduled to be commissioned by April 2016. We will endeavour to commission the project ahead of the specified schedule, as permitted under the PPA.

• Shahapur, a 4,000 MW coal-fired (1,200 MW) and combined cycle gas-fired (2,800 MW) project in
Shahapur, Maharashtra, which they intend to develop in two phases: Shahapur Coal, a supercritical coalfired project, is scheduled to be commissioned in December 2011, and Shahapur Gas, a combined cycle gas-fired project, is scheduled to be commissioned in March 2011.

• Urthing Sobla (400 MW), a run-of-the-river hydroelectric project, will be located on the Daulinganga River in Uttarakhand and is scheduled to be commissioned in March 2014.

Five other projects—the gas-fired Dadri project (7,480 MW), the coal-fired MP Power project (3,960 MW) and three run-of-the-river hydroelectric projects, Siyom (1,000 MW), Tato II (700 MW) and Kalai II (1,200 MW)—are in various stages of development. Dadri, a 7,480 MW project to be located in Uttar Pradesh, is expected to be the largest gas-fired power project at a single location in the world.

Allocation of the IPO:
Issue of Equity Shares 1,300,000,000
Of which:
Promoters’ Contribution 160,000,000
Net Issue to the Public 1,140,000,000
Of which:
Qualified Institutional Buyers (QIBs) Portion 684,000,000
Of which:
Available for Mutual Funds only 34,200,000
Balance of QIB Portion (available for QIBs including Mutual Funds) 649,800,000
Non-Institutional Portion 114,000,000
Retail Portion 342,000,000
Pre and post-Issue Equity Shares
Equity Shares outstanding prior to the Issue 10,000,000,000
Equity Shares outstanding after the Issue 11,300,000,000

Allocation will be done on a proportionate basis. Undersubscription, if any, in any categories except the QIB Portion, would be allowed to be met with spill over from any of the other categories, at the sole discretion of the company, in consultation with the BRLMs and the CBRLMs. If at least 60% of the Net Issue is not allocated to QIBs, the entire subscription money shall be refunded.

The DRHP (Draft Red Herring Prospectus) is available at:

Registrar of the Issue : Karvy Computershare Pvt Ltd (Ph: 04023420815/0816 Email: reliancepower.ipo@karvy.com ).

The upcoming website of the company is at http://www.reliancepower.co.in/