MUMBAI: A little over a month back, the Securities and Exchange Board of India (SEBI) allowed companies to offer discounts to retail investors during an initial offering of shares. The results are already showing.
According to sources, Reliance Power will be the first to offer such a discount to retail investors when the issue opens for subscription later this month. The IPO is estimated to raise about $3 billion, making it the biggest-ever in India.
Sources close to the development say that the company will be offering a discount of 5-6% to all retail investors applying for the IPO. The issue is expected to hit the market in mid-January and the shares will be listed in the first week of March.
It is believed that the price will be set in the Rs 400-450 range. The face value will be Rs 10 per share. In a circular dated November 29, 2007, SEBI had allowed for a maximum discount of 10% to retail investors.
While companies have offered discounts to retail investors during fresh issuance of shares, this will be the first time it happens in an IPO. Last year, ICICI Bank offered a discount to retail investors when it came out with a follow-on public offering (FPO).
The Reliance Power IPO got the regulatory nod just last week when SEBI disposed off a complaint against the issue. The regulator ruled that the entire promoter quota of 20% shall be locked in for a period of five years from the date of allotment.
The ruling came after an organisation filed a case alleging breach of corporate governance. The complainant said that Reliance Energy shareholders would be adversely affected by the IPO as several major projects had been transferred to Reliance Power from Reliance Energy, an ADAG company that owns 50% of Reliance Power.
However, SEBI ruled that it had no jurisdiction to decide or take action on allegations that the IPO would affect the interests of Reliance Energy shareholders.
The IPO of Reliance Power, in accordance with Rule 19(2)(b) of the Securities Contract (Regulation) Rules, 1957, will offer 60% of the issue to institutional investors. The non-institutional investors and retail segments will be pegged at 10% and 30% respectively.
The issue is managed by a clutch of investment banks including JP Morgan, JM Financial, Kotak, UBS, Deutsche, Enam, ICICI Securities and Macquarie, among others.
According to the draft prospectus, Reliance Power is currently developing 12 medium and large-sized power projects with a combined planned installed capacity of 24,200 MW, which is one of the largest portfolios of power generation assets under development in India.
According to sources, Reliance Power will be the first to offer such a discount to retail investors when the issue opens for subscription later this month. The IPO is estimated to raise about $3 billion, making it the biggest-ever in India.
Sources close to the development say that the company will be offering a discount of 5-6% to all retail investors applying for the IPO. The issue is expected to hit the market in mid-January and the shares will be listed in the first week of March.
It is believed that the price will be set in the Rs 400-450 range. The face value will be Rs 10 per share. In a circular dated November 29, 2007, SEBI had allowed for a maximum discount of 10% to retail investors.
While companies have offered discounts to retail investors during fresh issuance of shares, this will be the first time it happens in an IPO. Last year, ICICI Bank offered a discount to retail investors when it came out with a follow-on public offering (FPO).
The Reliance Power IPO got the regulatory nod just last week when SEBI disposed off a complaint against the issue. The regulator ruled that the entire promoter quota of 20% shall be locked in for a period of five years from the date of allotment.
The ruling came after an organisation filed a case alleging breach of corporate governance. The complainant said that Reliance Energy shareholders would be adversely affected by the IPO as several major projects had been transferred to Reliance Power from Reliance Energy, an ADAG company that owns 50% of Reliance Power.
However, SEBI ruled that it had no jurisdiction to decide or take action on allegations that the IPO would affect the interests of Reliance Energy shareholders.
The IPO of Reliance Power, in accordance with Rule 19(2)(b) of the Securities Contract (Regulation) Rules, 1957, will offer 60% of the issue to institutional investors. The non-institutional investors and retail segments will be pegged at 10% and 30% respectively.
The issue is managed by a clutch of investment banks including JP Morgan, JM Financial, Kotak, UBS, Deutsche, Enam, ICICI Securities and Macquarie, among others.
According to the draft prospectus, Reliance Power is currently developing 12 medium and large-sized power projects with a combined planned installed capacity of 24,200 MW, which is one of the largest portfolios of power generation assets under development in India.
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