Month's wait for R Power bonus to see light of day

MUMBAI: It's 23 days since chairman Anil Ambani declared a 3:5 bonus share issue in Reliance Power on Feb 24. The move aimed at compensating investors for the sharp fall in stock price two weeks after it listed.

“I have been personally concerned by the notional losses arising to millions of long term investors in Reliance Power, as a result of the adverse change in sentiment in global and domestic capital markets. We have taken this one-time measure, to protect and enhance value for all our long-term shareholders,” said Ambani.

Two days prior to the bonus announcement the stock had closed at Rs 416.85, down 7.36 per cent or Rs 33.15 from its issue price of Rs 450. A day after the declaration and first day of trade, Reliance Power shares rose 8 per cent.

Today the Reliance Power stock was at Rs 318.20 on NSE, up 0.84 per cent from Monday which saw the Sensex fall 950 points due to global turmoil.

The bonus issue would lower the cost per share to Rs 269 for individual investors 40 percent lower than the IPO price of Rs 430. The acquisition price would come down to Rs 281 for other investors, or 37 lower than the IPO price of Rs 450.

But investors looking for that succour will have to wait till April 21 when the results of the postal ballots seeking shareholders’ approval will be available. Then it will be a wait for the record date.

“Result of the postal ballot will be declared on Apr 21. After the results, we will intimate SEBI and will follow up the required regulations for bonus issue,” said Paresh Rathod, company secretary of Reliance Power, when contacted by ET Markets.

According to SEBI guidelines, a company must issue the bonus shares within six months from date of announcement.

Further, there are the eligibility criteria. Only shareholders holding shares on record date would be entitled to receive bonus shares. Original allottees from the IPO, but who have sold prior to record date, would not be eligible for the bonus shares.

This move is aimed at checking alleged detractors from a repeat situation of listing day on Feb 11, when the Reliance Power share ended 17 per cent lower.

On listing day, total 6.41 crore shares, or 28 per cent of the net offer to the public, were sold on the BSE and NSE combined.

Reliance Power had written to the Securities and Exchange Board of India seeking an investigation into the price fall, with Ambani accusing rivals for the share fall.

Around 11 crore shares have changed hands till date, according to NSE data. This makes for about 1/3 of total shares held by retail investors who will lose out on the bonus shares.

Reliance Power's IPO closed on Jan 18, receiving an overwhelming response, with commitments of nearly Rs 7,50,000 crore, from nearly 500 institutional investors and 5 million retail investors.

“In the current bearish scenario, if they (Reliance Power) fix the record date in April and the market remains volatile, there are chances the share price may go down significantly. The company is likely taking care about the timing for allotment,” said A Chauhan, fund manager at DMB Wealth Management.

3:5 bonus from Reliance Power; effective price will be Rs 269

Mumbai, Feb. 24 Reliance Power will offer three bonus shares to its investors for every five held in an effort to compensate for the fall of its share price after its high decibel, record-breaking initial public offering last month.

The bonus shares will not be offered to the promoters – Mr Anil Ambani, Chairman of the company, and Reliance Energy (REL) – who hold 45 per cent stake each in Reliance Power.

Mr Ambani is reducing his holding in the company to preserve REL’s shareholding at 45 per cent, to make good the notional loss that REL would suffer on account of the bonus issue.



“I am contributing my personal shareholding of 2.6 per cent in Reliance Power to Reliance Energy,” he said, at a news conference here on Sunday after the boards of the companies approved the free issue of shares.

This contribution and the bonus offer would see Mr Ambani’s stake in Reliance Power diluted by around 5 percentage points to 40 per cent, with him relinquishing around Rs 5,000 crore “in the interest of 6 million shareholders”. The public shareholding will be 15 per cent, up from 10 per cent currently.

“I am personally concerned by the notional losses to millions of investors after change in the global and domestic market sentiment after the IPO,” he said.

The bonus issue will effectively reduce the Reliance Power’s share price by nearly 40 per cent to Rs 269 for retail investors (who paid Rs 430 a share) and by 37 per cent to Rs 281 for institutional investors.

The IPO had attracted Rs 7,50,000 crore worth of bids, raising Rs 11,500 crore for the company. A large number of investors had borrowed funds for the IPO hoping to make a profit from the listing premium. When it listed on February 11 below issue price (and continued to remain below it ever since), investor angst at the company predictably ran high.

The market reaction to this bonus announcement appeared mixed. One long time broker said it would make little difference since after any such issue of shares, the stock price typically goes down and investors may still find they have not gained much. “However, they may be more favourably disposed towards the group, which has lined up more IPOs,” said another broker.

After shareholder approval, the record date for the bonus shares would be communicated through the exchanges, Mr Anil Ambani said.

Allotment, refund issues plague Reliance Power investors

MUMBAI: Even as the board of Reliance Power meets on Sunday to consider a bonus share issue, there are cases of investors not having got the shares allotted to them or the refund money even 10 days after the stock listed on the exchanges on February 11.

One investor wrote in to say he was as yet unsure if he has been allotted the shares. Neither has he received the refund money.

Karvy Computershare, registrar to the mega issue, had a different reason every time the investor called in to know the status. Initially he was told he was allotted the shares and it would take a few days to get transferred to his account. Failing which, he was told his application was “suspect and put on hold.” He received a further shock when a call center executive told him his cheque had bounced.

Once the basis of allotment is decided, which was February 1 in the case of R Power, the shares in an IPO need to be credited to the applicants within two working days.

Another applicant was told that his refund money was sent as a cheque via registered post on Feb 9. However, the local post-office personnel said they had received no such letter.

On being contacted, a Karvy official said that around 2 per cent of the total applications or 1,00,000 applications were on hold for various reasons.

According to SEBI officials, in the past one week they had received over 1,800 complaints and had flagged off the company on them. In reply, company officials said all the grievances would be resolved in next 10-15 days. The company is expected to come out with a report on the status of allotment and refund next week.

Source : http://economictimes.indiatimes.com

Reliance Power Ltd IPO Allotment Application Status

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Reliance Power has 42 lakh shareholders

Mumbai, Feb 1 Nearly 4.5 lakh retail investors, who applied for less than 225 shares of Reliance Power each, have not been made any allotments by the company.

This means that RPL has issued shares to only those applicants who committed to invest at least Rs 96,750 in its IPO.

The company’s IPO, which created several records on many counts and also created a liquidity crisis, said it had today commenced making its refunds of more than Rs 1 lakh crore.

This was in fact partly responsible for the reversal of the downward trend in the market earlier in the day.

The company has allotted 15 shares each to 41.7 lakh retail investors who applied for more than 225 shares each.

The company said it now had 42 lakh shareholders. There had been 50 lakh bids for the IPO.

Reliance Power had fixed the issue price at Rs 450, the upper end of its price band, after receiving subscriptions for 73 times the number of shares on offer. Retail investors were given shares at a discount of Rs 20, at Rs 430 per share.

The issue had attracted over 50 lakh bids from all categories of investors.

The refunds to QIBs and Non Institutional Investors have been effected today through electronic credits, said a statement from the company.

An aggregate of 446 domestic and international QIBs will receive only 1.2 per cent of their applied quantity of shares.

About 12,000 HNIs will receive only 0.6 per cent of their applied quantity of shares.

The QIB portion was subscribed 82.5 times; and high net worth individual category 159.6 times.

Thirty per cent of the net issue was reserved for retail investors whose subscription was 13.6 times the portion reserved for them.

Refund in 10 days


“The allotment and refund exercise post closure of the largest IPO ever has been carried out in a record time of 10 working days,” the company said in a statement.

The largest Indian public issue opened for subscription on January 15The IPO offered 26 crore shares of face value Rs 10 each in the price band of Rs 405 to Rs 450. It raised Rs. 11,500 crore.

Investors had made aggregate commitments of more than Rs 7,50,000 crore.

The stock market’s key indices the Sensex and the Nifty gained 3.3 per cent and 3.5 per cent respectively.

The IT sector was the largest gainer in today’s rally, rising by 5.77 per cent.

Source : http://www.thehindubusinessline.com





Click here to see the allotment details ..!!!!

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Reliance Power IPO Allotment Status

Click here to see the allotment details ..!!!!

Select Reliance Power Limited from the Drop Down List and Enter your application number. The list would be enabled once the registrar publishes the allotment details.

Good Luck !!

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