THURSDAY, JAN 3, 2008, (News Locale) - The Anil Dhirubhai Ambani promoted Reliance Energy is all set to woo retail investors with the initial public offering (IPO) of its subsidiary Reliance Power that will go public on January 15.  

The company is offering the investors a five percent discount on the shares that have a price band of Rs 405 to Rs 450. While each share has been priced at Rs 405 at the lower end, at the upper end of the band it is worth Rs 450. The discount will be available to all investors applying for shares worth Rs one lakh.

According to sources in Reliance Energy, the company hopes to raise anything between Rs 10,500 crore and Rs 11,700 crore from the sale of 26 crore shares in the IPO.

Industry analysts say that by the time the IPO closes, Reliance Energy will be the largest listed company in the Anil Ambani Group with a market cap of Rs 1.1 lakh and elevated among the top 10 stocks listed with the Bombay Stock Exchange.

Interestingly, through its IPO the Anil Ambani Group will be offering a unique opportunity to the retail investors who may pay for the shares in phases.

According to this phase-payment offer, retail investors will only be required to pay 25 percent of their total investment at the time of applying for the shares, while the remaining amount can be paid during the first call. As a result, the investors are not bound to lock their entire sum for the investment at a single go.

According to sources, the Reliance Power offering, which will be India’s biggest ever IPO is likely to create noteworthy attention from both institutional as well as retail investors.

The rating agency Crisil has ranked the Reliance Power IPO '4/5', a hint that the rudiments of the issue are above average.  Meanwhile, it may be noted here that the company is setting up 13 power projects over the next five years and the first among them will start operations towards the end of 2009. Altogether, Reliance Power will have 28,000 megawatts of capacity.

On the other hand, JSW Energy Ltd. also plans to raise as much as $1 billion to build generators, driving a record year for initial share sales by Indian power producers. The company will now apply for regulatory approval this month and complete the sale by the end of March. 

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