Sunday, February 10, 2008

Reliance Power lists today

It has been a roller-coaster three weeks since India’s largest initial public offering (IPO), that of Reliance Power Ltd, closed.

Back then, if the premium that the shares commanded in the illegal grey market was any indication, investors were willing to pay almost double its Rs450 price. The Rs11,500 crore issue was subscribed in just one minute.

By the time the share lists today, two high-profile IPOs have been abandoned due to a lack of response. The Bombay Stock Exchange’s (BSE) benchmark index, the Sensex, has lost more than 3,200 points in that time.

So, how will Reliance Power fare? “It is like going to a restaurant. The food maybe very good, but if the ambience is not good, then your experience does get affected,” says Arun Kejriwal, director, Kejriwal Research and Information Services. “Nothing has changed for the issue itself, but sentiment in the market has changed, which will affect the listing price.”

Right after the issue closed, the market tumbled on global fears about the impact of the US subprime crisis. Two rate cuts by the US Federal Reserve within eight days and a Bank of England rate cut could not stem the flight of foreign capital from emerging markets. Read More>>