Reliance Power IPO Coming On 5th December ???

[Platinum]

Reliance Power IPO Coming On 5th December ???
Just read this message from someone at Moneycontrol. Message said that Most Probably, IPO will open on 5th Dec and close on 12th Dec.

Guys, Please confirm from ur souces if this news is true.

If thats the case then i m going to go for max application and not invest in Eideweiss Capital. Dont want the money to Block in it.

[Vansh Khanuja]

hi sir ,
have u got the confirm news on RIL power listing , pls inform!!!!!!!

[gundeep]

Nothing official right now, every thing is just rumours at the moment.

[praveen]

ADAG seeks to raise Reliance Power IPO face value to Rs 10

Anil Ambani group has sought market regulator SEBI's nod to float Reliance Power's initial public offer at a face value of Rs 10 a share instead of Rs two proposed earlier, a move that could hasten the share sale.

The group wrote to Securities and Exchange Board of India earlier last week, seeking permission in this regard.

Company officials and the spokesperson could not be contacted for comments. SEBI officials also could not be immediately contacted.

The communication said the IPO was proposed at a face value of Rs two a share to involve a larger number of retail investors, but offered the option of floating the shares at Rs 10 a share in case the earlier proposal did not meet the regulator's requirement.

Reliance Power had filed the draft prospectus for the issue, being pegged as the largest ever IPO in India and the first such public issue from Anil Ambani group, in early October. However, SEBI is yet to issue its observations that are necessary to go ahead with the offering.

The company had earlier proposed to issue 130 crore shares of Rs 2 each, which will constitute 11.5 per cent of its share capital. It is estimated to raise three billion dollars, more than the country's biggest IPO so far -- that of realty firm DLF, which mopped up over two billion dollars.

"The issue proceeds are proposed to be utilised for funding subsidiaries to part-finance the construction and development costs of various projects and for general corporate purposes," the company had stated earlier.

The IPO by Reliance Power, which recently bagged the 4,000 MW Sasan power project, is considered to be a part of revenue mobilisation exercise for its estimated Rs 1,00,000 crore investment plans.

[praveen]

Rating agency Crisil has assigned an above average rating to the proposed initial public offering (IPO) of the Anil Ambani group firm Reliance Power that is estimated to raise up to $3 billion.

Crisil's 'four-on-five' grade indicates that the fundamentals of the issue are above average in relation to other listed equities in India.

"...strong demand for power will catalyse regulatory facilitation for private participation in the power sector over the medium- to long-term. In this scenario, early movers like Reliance Power will benefit from attractive business opportunities that are likely to come about as a result," Crisil said in a statement.

Reliance Power filed the draft prospectus for its IPO in the first week of October. The IPO is understood to have secured the nod of Securities and Exchange Board of India. The company proposes to issue 130 crore equity shares.

Crisil grades IPOs on a scale of one to five. Grade one indicates poor fundamentals, while five-on-five is given to an issue with strong fundamentals.

The agency also said power generators in India will have to depend on state electricity boards for offtake over the short-to-medium term and their return will be subject to regulatory oversight in case of tariff-based projects.

Also, returns on the projects won through the competitive bidding route may not be substantially higher due to competition. Reliance Power has bagged two of the three ultra mega power projects awarded by the government so far.

Besides Reliance, recent IPOs of software services firm Persistent Systems, steel pipe maker Precision Pipes and Profiles Company, and brokerage firm Edelweiss Capital have been assigned 'four-on-five' grade by Crisil.

[sha]

Nothing official right now, every thing is just rumours at the moment.

Pl. inform when the future group IPO is coming................

[praveen]

Anil Ambani Group firm Reliance Power will give retail investors a 5% discount in its forthcoming IPO through which the company will raise up to Rs 11,700 crore, merchant bankers said.

The initial public offering (IPO) is expected to hit the capital market between January 15-18 in a price band of Rs 405-450 per share, bankers close to the development said.

Based on the upper limit of the price band, the company would raise Rs 11,700 crore with the sale of 260 millon shares in the public offer. This would be the biggest-ever IPO in India surpassing the public issue of realty giant DLF that raised about Rs 9,000 crore last year.

This is believed to be the first IPO to offer a discount for retail investors.

Rating agency Crisil assigned an above average 4-on-5 rating to the proposed IPO of Reliance Power.

Reliance Power filed the draft prospectus for its IPO in the first week of October 2007, and received the go-ahead from the market regulator last week

[g.subhadip]

RELIANCE POWER IPO COME ON 15th jan............. its most prob 450- 475

[gundeep]

Reliance Power to invest $28 billion in 13 projects
Reliance Power Ltd, part of the Reliance Anil Dhirubhai Ambani Group (RADAG), will generate over 28,000 MW of electricity by building 13 projects in the next 6-7 years with an investment of $28 billion..

Reliance Power sets sights on govt assets
NEW DELHI: Reliance Power, the power generation arm of Anil Ambani’s Reliance Energy, is planning to tap the inorganic route and explore possibilities of taking over existing government power projects, including Ratnagiri Gas and Power plant at Dabhol, to scale up its generation capacity…

Rel Power IPO opens on Jan 15, to raise Rs 10500-11500 Cr
Reliance Power today filed the red herring prospectus (RHP) with the Registrar of Companies, Maharshtra, Mumbai (ROC), for its proposed initial public offering (IPO).Reliance Power has fixed the price band for the IPO at Rs 405 - 450 per share….

R-Power IPO: You can pay in phases
MUMBAI: Reliance Energy is going all out to woo retail investors for the upcoming initial public offer (IPO) of its subsidiary, Reliance Power. After deciding to offer shares to retail investors at a 5% discount to the price band of Rs 405-450, the Anil Ambani Group entity intends to provide this investor segment with a “staggered payment” option in this IPO….

First project to go onstream in 2009: Anil Ambani
Reliance Power today filed the red herring prospectus (RHP) with the Registrar of Companies, Maharshtra, Mumbai (ROC), for its proposed initial public offering (IPO). Reliance Power has fixed the price band for the IPO at Rs 405 - 450 per share…

Rel Power valuation has set a benchmark: Kotak Sec
Speaking to CNBC-TV18, Shashank Khade, VP - Portfolio Management Services, Kotak Securities said that the poster boy of the entire power stock rally has undoubtedly been Reliance Power Limited and that thanks to its valuations, benchmark valuations have now been set. According to him, power is clearly a subject where huge momentum has been built in the last 3-4 months and valuations are clearly ahead of time. He added that, power is a clearly a high risk investment game right now….

Reliance Power keen on investing in Gujarat
As it gears up for what is being termed India’s largest initial public offering (IPO), Reliance Power, a unit of Reliance Energy, is exploring investment opportunities in Gujarat.

[dkishore]

Bull markets defies logic.Classic example is now in Reliance Power
IPO.Lets Analyse.**

Just for a moment think two companies in the power generation sector
that Reliance Power can be compared with:

*NTPC and Tata Power.*

*NTPC* has current capacity of 28000 MW and has target to achieve
66000 MW by 2017.

*Tata Power* has current capacity of 2300 MW. It will be adding 10000
MW of capacity more by 2012. Thus, it will have a capacity of around
12300 MW by 2012 end.

If everything goes as planned, capacity of Reliance Power at end of
each year till 2016 will be:

2008: 0 MW.
2009: 0 MW.
2010: 1500 MW.
2011: 5500 MW.
2012: 5500 MW.
2013: 16980 MW.
2014: 22040 MW.
2015: 23040 MW.
2016: 28200 MW.

Around 2012 - 2013, both Tata Power is expected to have similar
capacity as Reliance Power.

The interesting thing is at current price of Rs 1457, Tata Power is
valued at just Rs 30000 crore. Remove Rs 10000 crore of investments
and you can have it only for Rs 20000 crore.

At Rs 450, Reliance Power will have market cap of 100,000 crores.
Roughly 3.34 times that of Tata Power.If it lists at 900 then the
market cap would be 200,000 crores

With 2300 MW capacity, Tata Power made standalone profit of Rs 700
crore in FY 2007. With 28000 MW capacity, NTPC made standalone profit
of Rs 6900 crore in FY 2007.

Lets assume Reliance Power turns out to be much more efficient than
these two companies. Add to that increased power rates.

With 28200 capacity, assume Reliance Power makes Rs 15000 crore of net
profit in 2016-2017. Power companies are considered as utilities and
worldwide trade at 10-15 times their earnings.

Lets assume 15 times ratio for Reliance Power in 2016.
What will be its market value?

15000 X 15 = Rs 225,000 crore or Rs 995 per share.

*This is an optimistic view:
-there will be no further equity dilution till 2016.
-assuming nearly twice as much efficiency as NTPC.
-that all projects will be completed before 2016 end.
-the company would have paid back all debt by then and interest costs
would be in similar range as NTPC.

(NTPC already has established 28000 MW capacity and comparatively much
lesser interest costs.NTPC's P&L account states Rs 1800 interest cost
for FY 2007).

So what about the debt?

The RHP mentions estimated cost of six projects as Rs 30000 crore+.
Analysts estimate that Reliance Power will need another Rs 70000 crore
of debt to finance its projects which are estimated to cost 100000
crore+.

*Rs 70000 crore of debt* is not going to come at 2% interest rate.
Even a 6% interest would mean *an annual interest cost of Rs 4200
crore*. Only in 2013, the company's capacity will cross 10000 MW.
Thus, I do not expect any major debt repayment before 2014. If things
don't go as planned, the debt burden will make a mockery of the
balance sheet.

With Rs 12000 crore raised in equity and Rs 70000 crore of debt, these
whole business will become a high-risk venture.Any unforeseen delay/
derailment of plans may create major problems for this company.

*Reliance Power - The Overlooked Fact:

*Is Reliance Power just "Reliance Power"?

No.

It is actually "Reliance Power Limited" - a limited company.
So what does this mean for Reliance Power Limited?
It means if in the rare case, the calculations of the management go
wrong and the company somehow goes to insolvency, none of the
shareholders will lose anything expect the value of the shares.

If you are a share holder of Reliance Power and it goes into
insolvency (unable to pay back debts), what do you stand to lose?

Rs 430 per share.

Lot of money....right?

*What does Anil Ambani's AAA Project or REL lose?*

Both of them had got their 45% (post-IPO) stake for Rs 1000 crore
each. Plus they will each subscribe to 1.6 crore shares each at Rs 450
in the IPO......which works out to be Rs 720 crore.

Thus, AAA Project will be getting 101.6 crore shares of Reliance Power
for Rs 1720 crore and REL will be getting 101.6 crore shares of
Reliance Power for Rs 1720 crore.

*Little less than Rs 17 per share.

*This is what both the promoters are risking in this project....* Rs 17
per share*; while investors will be risking *Rs 450 per share*.

*This is exactly the reason why Reliance Power was created.

First, by contributing just Rs 1720 crore each to Reliance Power, the
promoters have shifted all risk to investors.

Second, by getting 45% stake (in REL's projects) to AAA Project for a
mere Rs 1000 crore, AAA Projects (and Anil Ambani) have created wealth
out of thin air.

Anil Ambani's Rs 1000 crore investment will be worth Rs 100000 crore
when Reliance Power lists at Rs 900.

If the gamble works, the promoters (holding 90% stake in Reliance
Power) will be worth billions of dollars.

If the gamble doesn't work, the promoters will lose Rs 1720 crore each
and investors will lose Rs 10000+ crore which they will be paying for
a mere 10% stake in Reliance Power.

*What a way to create wealth...!!! ....I don't have words to describe
the brilliance of Anil Ambani's plans....

============ ========= ========= ========= =

So what will I do with this IPO?

Firstly, I will subscribe to it,not because I think it is a good
company or is offering great value at Rs 430, but because I am in this
market to make money.

The markets are in such a frenzy, nobody bothers about valuations
anymore..... ...not even QIB and other institutional investors.

Everyone knows that Reliance Power will list at a premium and thus
everyone will apply....valuations can wait for some other day.....

*What will I do post-listing? *

For bigger IPO's like Power Grid and Mundra Port, I have followed a
*sell-half-keep- half strategy.*

Assuming listing at Rs 900, for Reliance Power, I will follow *sell-
all-keep-none strategy.*

*First, other companies are much cheaper.**

*Why should I keep a company valued at *Rs 200000 crore* -
when another company (with similar capacity by 2013) is available at
*Rs 30000 crore* with* much smaller debt burden* and *Rs 10000 crore
worth of investments* .referring to Tata Power.

If Reliance Power (at Rs 900) is available for Rs 200000 crore, *why
not buy NTPC for a similar price*...... Rs 225000 crore. NTPC plans to
have a capacity of 66000 MW in 2017, while Reliance Power will have
28200 MW capacity in 2016.

*Second, the risk is higher than other existing companies.*

With marginally cash flows for next 5 years and Rs 70000+ crore of
debt, the *risk for Reliance Power is high*. *Tata Power and NTPC have
existing cash flows to handle expansions.. ..Reliance Power does not.*
*

Third and the biggest factor is....the valuation of the company
doesn't make much sense.*

Why should Reliance Power be valued at Rs 200,000 crore, when in
*highly optimistic scenario, it will not make more than Rs 15000 crore
of profit in 2016*? Even if it touches that figure of Rs 15000 crore,
its market value in 2016 will not be much more than 225,000-300, 000
crore. (if given a 15-20 times multiple).

*A fixed deposit will make more money than that in 8 years.....and
that too without any risk.

Also, I got the optimistic Rs 15000 crore figure by assuming two times
margins as NTPC. The fact is..... at least till 2014, Reliance Power
will still be carrying most of its Rs 70000 crore debt and its
interest costs will squeeze margins to a large extent. *

Final verdict: Apply with your own level of risk.

I will be selling all shares at 9:55........ ..not even waiting for a
better price. If you want to try for a better price, hold at your own
risk.

The level of insanity in the markets is at a high...

*Value* and *risk* mean nothing today.....*price* and *profit* are the
keywords.




Padmanabhan

[dkishore]

Reliance Power IPO Listing Date is likely to be in the first week of February. Before the Reliance Power IPO opened for subscription, Business Standard quoted Anil Ambani saying he was targetting a february first week listing for Reliance Power IPO. The exact listing date of reliance power ipo will be updated as soon as it is announced. The good news is the final Reliance Power IPO subscription figures indicate that the IPO has subscribed by over 73 times, with retail subscribing just about 15 times, which means if you have applied for 15 lots, that is 225 shares, then you surely will receive 15 shares that is 1 lot of ipo stocks.