Controversy Over Reliance Power IPO

Like in every high profile IPO, queries about the issue start pouring in way before the issue even got a clearance from the regulator. While it is left to the regulator to take a stand, a retired Judge of the Punjab High Court wrote a letter to SEBI questioning setting up of another company called Reliance Public Utilities Limited or RPUL which is key to Anil Ambani's holding in Reliance Power. RPUL till July 2007 had just Rs 1 lakh as capital. Its authorised capital was increased to Rs 1,000 crore in August 2007, of which Anil Ambani pitched in with Rs 500 crore while Reliance Energy invested rest of the money.

Finally RUPL was merged with Reliance Power. The reason for merger is technical skills are available with RPUL. Allegations in the letter also raise a pertinent question of why the promoter should not contribute money at the IPO price like other investors. A couple of MPs have also shot of letters alleging various inconsistencies in the Reliance Power application. ADAG group strongly denied these allegations. A Vicious campaign of disinformation is underway by vested industrial interests to stall Reliance Power IPO.