Saturday, December 29, 2007

SEBI Approves Reliance Power's IPO

MUMBAI: Anil Ambani group on Friday got the regulatory go-ahead from SEBI for the public issue of Reliance Power Ltd, the group's first IPO and estimated to raise about $3 billion, the highest ever proceeds in India.

Securities and Exchange Board of India has issued its observations on the draft prospectus of RPL, while clearing the way for IPO, sources close to the development said.

The public offer by the ADAG firm Reliance Energy's subsidiary is expected to be launched early next year and could raise over three billion dollars, eclipsing the public issue of realty giant DLF, which had raised more than two billion dollars and is the biggest ever IPO so far.

The go-ahead comes a day after SEBI disposed off a complaint against the IPO, while saying that "the entire promoter quota, that is, 20 per cent of the capital in RPL shall be locked in for a period of five years from the date of allotment in the proposed IPO."

SEBI on Thursday put a rider of five-year lock-in period on promoters' equity while disposing off a complaint against the proposed initial public offer of Anil Ambani group company Reliance Power Ltd.

Listing out the eligibility criteria for computation of promoters' contribution, SEBI said: "The entire promoter quota, that is, 20 per cent of the capital in RPL shall be locked in for a period of five years from the date of allotment in the proposed IPO."

A two-member bench comprising members T C Nair and V K Chopra, accordingly disposed off the case that it was hearing following an order by Mumbai High Court on a PIL.

When contacted, an ADAG spokesperson declined to comment. While SEBI wanted full disclosure by promoters and the lead managers as per the various statutes and guidelines to protect the interest of investors, it did not take up the issue of 'short charging of shareholders' due to transfer of projects from ADAG group company Reliance Energy Ltd to RPL.

The company is estimated to raise up to three billion dollars through the proposed public offer.

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