INTRODUCTION ABOUT IPO : An initial public offering (IPO) or stock market launch is a type of public offering where shares

of stock in a company are sold to the general public, on a securities exchange, for the first time. Through this process, a private company transforms into a public company. Initial public offerings are used by companies to raise expansion capital, to possibly monetize the investments of early private investors, and to become publicly traded enterprises. A company selling shares is never required to repay the capital to its public investors. After the IPO, when shares trade freely in the open market, money passes between public investors. Although an IPO offers many advantages, there are also significant disadvantages. Chief among these are the costs associated with the process, and the requirement to disclose certain information that could prove helpful to competitors, or create difficulties with vendors. Details of the proposed offering are disclosed to potential purchasers in the form of a lengthy document known as a prospectus. Most companies undertaking an IPO do so with the assistance of an investment banking firm acting in the capacity of an underwriter. Underwriters provide a valuable service, which includes help with correctly assessing the value of shares (share price), and establishing a public market for shares (initial sale). Alernative methods, such as the dutch auction have also been explored. The most notable recent example of this method is the Google IPO. China has recently emerged as a major IPO market, with several of the largest IPO offerings taking place in that country.

Reasons for listing : When a company lists its securities on a public exchange, the money paid by the investing public for the newly issued shares

goes directly to the company (primary offering) as well as to any early private investors who opt to sell all or a portion of their holdings (secondary offering) as part of the larger IPO. An IPO, therefore, allows a company to tap into a wide pool of potential investors to provide itself with capital for future growth, repayment of debt, or working capital. A company selling common shares is never required to repay the capital to its public investors. Those investors must endure the unpredictable nature of the open market to price and trade their shares. After the IPO, when shares trade freely in the open market, money passes between public investors. For early private investors who choose to sell shares as part of the IPO process, the IPO represents an opportunity to monetize their investment. After the IPO, once shares trade in the open market, investors holding large blocks of shares can either sell those shares piecemeal in the open market, or sell a large block of shares directly to the public, at a fixed price, through a secondary market offering. This type of offering is not dilutive, since no new shares are being created. Once a company is listed, it is able to issue additional common shares in a number of different ways, one of which is the followon offering. This method provides capital for various corporate purposes through the issuance of equity (see stock dilution) without incurring any debt. This ability to quickly raise potentially large amounts of capital from the marketplace is a key reason many companies seek to go public. An IPO accords several benefits to the previously private company:

Enlarging and diversifying equity base Enabling cheaper access to capital Increasing exposure, prestige, and public image Attracting and retaining better management and employees through liquid equity participation Facilitating acquisitions (potentially in return for shares of stock)

Creating multiple financing opportunities: equity, convertible debt, cheaper bank loans, etc.

Disadvantages of an IPO There are several disadvantages to completing an initial public offering:

Significant legal, accounting and marketing costs, many of which are ongoing Requirement to disclose financial and business information Meaningful time, effort and attention required of senior management Risk that required funding will not be raised Public dissemination of information which may be useful to competitors, suppliers and customers.

Procedure IPOs generally involve one or more investment banks known as "underwriters". The company offering its shares, called the "issuer", enters into a contract with a lead underwriter to sell its shares to the public. The underwriter then approaches investors with offers to sell those shares. The sale (allocation and pricing) of shares in an IPO may take several forms. Common methods include:

Best efforts contract Firm commitment contract All-or-none contract Bought deal

A large IPO is usually underwritten by a "syndicate" of investment banks, the largest of which take the position of "lead underwriter". Upon selling the shares, the underwriters retain a

portion of the proceeds as their fee. This fee is called an underwriting spread. The spread is calculated as a discount from the price of the shares sold (called the gross spread). Components of an underwriting spread in an initial public offering (IPO) typically include the following (on a per share basis): Manager's fee, Underwriting feeearned by members of the syndicate, and the Concessionearned by the brokerdealer selling the shares. The Manager would be entitled to the entire underwriting spread. A member of the syndicate is entitled to the underwriting fee and the concession. A broker dealer who is not a member of the syndicate but sells shares would receive only the concession, while the member of the syndicate who provided the shares to that broker dealer would retain the underwriting fee.[2] Usually, the managing/lead underwriter, also known as the bookrunner, typically the underwriter selling the largest proportions of the IPO, takes the highest portion of the gross spread, up to 8% in some cases. Multinational IPOs may have many syndicates to deal with differing legal requirements in both the issuer's domestic market and other regions. For example, an issuer based in the E.U. may be represented by the main selling syndicate in its domestic market, Europe, in addition to separate syndicates or selling groups for US/Canada and for Asia. Usually, the lead underwriter in the main selling group is also the lead bank in the other selling groups. Because of the wide array of legal requirements and because it is an expensive process, IPOs typically involve one or more law firms with major practices in securities law, such as the Magic Circle firms of London and the white shoe firms of New York City. Public offerings are sold to both institutional investors and retail clients of the underwriters. A licensed securities salesperson (Registered Representative in the USA and Canada) selling shares of a public offering to his clients is paid a portion of the selling concession (the fee paid by the issuer to the

underwriter) rather than by his client. In some situations, when the IPO is not a "hot" issue (undersubscribed), and where the salesperson is the client's advisor, it is possible that the financial incentives of the advisor and client may not be aligned. The issuer usually allows the underwriters an option to increase the size of the offering by up to 15% under certain circumstance known as the greenshoe or overallotment option. This option is always exercised when the offering is considered a "hot" issue, by virtue of being oversubscribed. In the USA, clients are given a preliminary prospectus, known as a red herring prospectus, during the initial quiet period. The red herring prospectus is so named because of a bold red warning statement printed on its front cover. The warning states that the offering information is incomplete, and may be changed. The actual wording can vary, although most roughly follow the format exhibited on the Facebook IPO red herring[3]. During the quiet period, the shares cannot be offered for sale. Brokers can, however, take "indications of interest" from their clients. At the time of the stock launch, after the Registration Statement has become effective, indications of interest can be converted to buy orders, at the discretion of the buyer. Sales can only be made through a final prospectus cleared by the Securities and Exchange Commission. Before legal actions initiated by New York Attorney General Eliot Spitzer, which later became known as the Global Settlement enforcement agreement, some large investment firms had initiated favorable research coverage of companies in an effort to aid Corporate Finance departments and retail divisions engaged in the marketing of new issues. The central issue in that enforcement agreement had been judged in court previously. It involved the conflict of interest between the investment banking and analysis departments of ten of the largest investment firms in the United States. The investment firms involved in the settlement had all engaged in actions and

practices that had allowed the inappropriate influence of their research analysts by their investment bankers seeking lucrative fees.[4] A typical violation addressed by the settlement was the case of CSFB and Salomon Smith Barney, which were alleged to have engaged in inappropriate spinning of "hot" IPOs and issued fraudulent research reports in violation of various sections within the Securities Exchange Act of 1934. Dutch Auction A Dutch Auction allows shares of an initial public offering to be allocated in an impartial way, with all successful bidders paying the same price per share. One version of the Dutch auction is OpenIPO, which is based on an auction system designed by Nobel Prize-winning economist William Vickrey. This auction method uses a mathematical model to treat all qualifying bids in an impartial way. It is similar to the model used to auction Treasury bills, notes, and bonds. Like a typical auction, the highest bidders win in this type of auction, but there are important differences. In the OpenIPO auction, the entire auction is private, and winning bidders all pay the same price per sharethe public offering price. A variation of the Dutch Auction has been used to take a number of companies public including Morningstar, Interactive Brokers Group, Overstock.com, Ravenswood Winery, Clean Energy Fuels, and Boston Beer Company. In 2004, Google used the Dutch Auction system for its Initial Public Offering. Traditional investment banks have shown resistance to the idea of using an auction process to engage in public securities offerings. The auction method allows for equal access to the allocation of shares and eliminates the favorable treatment accorded important clients by the underwriters in conventional IPOs. In the face of this resistance, the Dutch Auction is still a little used method in public offerings.

In determining the success or failure of a Dutch Auction, one must consider competing points of view. If the objective is to raise as much money as possible for the issuer, a traditional IPO offering, priced near the top end of the underwriter's range, would likely achieve that objective. From the viewpoint of the investor, however, the Dutch Auction would be more effective at price discovery, and potentially result in a lower offering price. Direct Public Offering Financial historians Richard Sylla and Robert E. Wright have shown that before 1860 most early U.S. corporations sold shares in themselves directly to the public without the aid of intermediaries like investment banks.[5] The direct public offering or DPO, as they term it,[6] was not done by auction but rather at a share price set by the issuing corporation. The DPO eliminated the agency problem associated with offerings intermediated by investment banks but was not as effective at price discovery as the Dutch Auction. Pricing of IPO A company planning an IPO typically appoints a lead manager, known as a bookrunner, to help it arrive at an appropriate price at which the shares should be issued. There are two primary ways in which the price of an IPO can be determined. Either the company, with the help of its lead managers, fixes a price (fixed price method) or the price can be determined through analysis of confidential investor demand data, compiled by the bookrunner. That process is known as book building. Historically, some IPOs both globally and in the United States have been underpriced. The effect of "initial underpricing" an IPO is to generate additional interest in the stock when it first becomes publicly traded. Flipping, or quickly selling shares for a profit, can lead to significant gains for investors who have been allocated shares of the IPO at the offering price. However,

underpricing an IPO results in lost potential capital for the issuer. One extreme example is theglobe.com IPO which helped fuel the IPO "mania" of the late 90's internet era. Underwritten by Bear Stearns on November 13, 1998, the IPO was priced at $9 per share. The share price quickly increased 1000% after the opening of trading, to a high of $97. Selling pressure from institutional flipping eventually drove the stock back down, and it closed the day at $63. Although the company did raise about $30 million from the offering it is estimated that with the level of demand for the offering and the volume of trading that took place the company might have left upwards of $200 million on the table. The danger of overpricing is also an important consideration. If a stock is offered to the public at a higher price than the market will pay, the underwriters may have trouble meeting their commitments to sell shares. Even if they sell all of the issued shares, the stock may fall in value on the first day of trading. If so, the stock may lose its marketability and hence even more of its value. This could result in losses for investors, many of whom being the most favored clients of the underwriters. Underwriters, therefore, take many factors into consideration when pricing an IPO, and attempt to reach an offering price that is low enough to stimulate interest in the stock, but high enough to raise an adequate amount of capital for the company. The process of determining an optimal price usually involves the underwriters ("syndicate") arranging share purchase commitments from leading institutional investors. Some researchers (e.g. Geoffrey C., and C. Swift, 2009) believe that the underpricing of IPOs is less a deliberate act on the part of issuers and/or underwriters, than the result of an over-reaction on the part of investors (Friesen & Swift, 2009). One potential method for determining underpricing is through the use of IPO Underpricing Algorithms. Quiet period

There are two time windows commonly referred to as "quiet periods" during an IPO's history. The first and the one linked above is the period of time following the filing of the company's S-1 but before SEC staff declare the registration statement effective. During this time, issuers, company insiders, analysts, and other parties are legally restricted in their ability to discuss or promote the upcoming IPO (U.S. Securities and Exchange Commission, 2005). The other "quiet period" refers to a period of 40 calendar days following an IPO's first day of public trading. During this time, insiders and any underwriters involved in the IPO are restricted from issuing any earnings forecasts or research reports for the company. Regulatory changes enacted by the SEC as part of the Global Settlement enlarged the "quiet period" from 25 days to 40 days on July 9, 2002. When the quiet period is over, generally the underwriters will initiate research coverage on the firm. Additionally, the NASDAQ and NYSE have approved a rule mandating a 10-day quiet period after a Secondary Offering and a 15-day quiet period both before and after expiration of a "lock-up agreement" for a securities offering.

Stag profit Stag profit is a stock market term used to describe a situation before and immediately after a company's Initial public offering (or any new issue of shares). A stag is a party or individual who subscribes to the new issue expecting the price of the stock to rise immediately upon the start of trading. Thus, stag profit is the financial gain accumulated by the party or individual resulting from the value of the shares rising. Share Delivery

Not all IPOs are eligible for delivery settlement through the DTC system, which would then either require the physical delivery of the stock certificates to the clearing agent bank's custodian, or a delivery versus payment (DVP) arrangement with the selling group brokerage firm. Largest IPOs 1. Agricultural Bank of China US$22.1 billion (2010)[7] 2. Industrial and Commercial Bank of China US$21.9 billion (2006)[8] 3. American International Assurance US$20.5 billion (2010)[9] 4. Visa Inc. US$19.7 billion (2008)[10] 5. General Motors US$18.15 billion (2010)[11] 6. Facebook, Inc. US$16 billion (2012)[12] Value of IPOs Prior to 2009, the United States was the leading issuer of IPOs in terms of total value. Since that time, however, China (Shanghai, Shenzhen and Hong Kong) has been the leading issuer, raising $73 billion (almost double the amount of money raised on the New York Stock Exchange and NASDAQ combined) up to the end of November 2011. The Hong Kong Stock Exchange raised 30.9 billion in 2011 as the top course for the third year in a row, while New York raised 30.7 billion.

RELIANCE POWER

BSE Jul 16, 17:00 105.35 -0.10 (-0.09%)

VOLUME 1,086,365 Prev. Close 105.45 Open Price 106.00 Bid PRICE (QTY.) 0.00 (0)

Offer PRICE (Qty.) 104.80 (758) Todays Low/High 104.40 107.45 52 Wk Low/High 68.50 139.40 LIVE NSE Jul 16, 17:00 105.30 -0.30 (-0.28%) VOLUME 3,859,768 Prev. Close 105.60 Open Price 105.95 Bid PRICE (QTY.) 0.00 (0) Offer PRICE (Qty.)

105.30 (37582) Todays Low/High 104.35 107.50 52 Wk Low/High 68.50 139.40 MARKET CAP (Rs Cr) 29,552.01 *P/E 94.91 *BOOK VALUE (Rs) 57.78 DIV (%) 0.00% Market Lot 1 INDUSTRY P/E 13.81 *EPS (TTM) 1.11 *P/C 94.06 *PRICE/BOOK 1.82 DIV YIELD.(%) -% FACE VALUE (Rs) 10.00

Share Holding Pattern in (%) View details Sep' 11 Jun' 11 Promoter 80.42 80.42 FII 4.37 4.82 DII 1.79 1.75 Others 13.42 13.01 Total 100.00 100.00

Mar' 11 80.42 4.61 1.76 13.21 100.00

Dec' 10 80.42 4.70 1.76 13.12 100.00

REGISTERED OFFICE Address H Block, First Floor,,Dhirubhai Ambani Knowledge City District New Mumbai State Maharashtra Pin Code 400710 Tel. No. 22-30373333 22-30386010 Fax No. 22-30385169 22-30376633 Email: [email protected] Internet http://www.reliancepower.co.in

REGISTRARS Name Karvy Computershare Private Ltd. Address Plot No. 17-24, Vittal Rao Nagar, Madhapur, Tel. No. 040-44655000 Fax No. 040-44655814, 23420814 Email: [email protected] Internet http://www.karvy.com MANAGEMENT Name Designation Anil Dhirubhai Ambani Chairman / Chair Person J L Bajaj Director Yogendra Narain Director V K Chaturvedi

Director

Income Statement (In Rs Cr) (Mar '12) Quarterly Net Sales Other Income PBDIT Net Profit Balance Sheet (Mar '12) (In Rs Cr) Total Share Capital Net Worth Total Debt Net Block Investments Net Current Assets 2805.13 15896.57 1554.05 85.23 8578.32 8728.19 17450.60 19.51 6.86 -25.04 30.77 (Mar '12) Yearly 66.12 465.73 374.20 310.86

Total Assets

Simple Moving Averages Days 30 50 150 200 BSE 101.40 97.84 102.02 98.59 NSE 101.44 97.86 102.04 98.63

Peer Comparison

Market Cap Price Net Sales Net Profit Total Assets Price Performance

Company Last % 52 wk 52 wk Market Name Price Change High Low Cap NTPC 158.35 -0.75 190.30138.95130,566.93 Power 112.35 0.27 115.25 93.60 52,014.96

Grid Corp Reliance 105.35 -0.09 139.40 68.50 29,552.01 Power Tata 96.50 -2.23 132.40 80.65 22,900.15 Power NHPC 18.30 -1.35 25.85 17.45 22,510.36

Reliance Power Limited (BSE: 532939) is part of the Reliance Anil Dhirubhai Ambani Group. It was established to develop, construct and operate power projects in the domestic and international markets. Reliance Energy Limited, an Indian private sector power utility company along with the Anil Dhirubhai Ambani Group promotes Reliance Power. Along with its subsidiaries, it is presently developing 13 medium and large-sized power projects with a combined planned installed capacity of 33,480 MW. Reliance Natural Resources merged with Reliance Power in 2010, shortly after its initial public offering.[ The company was incorporated in January 1995 as Bawana Power Private Limited and changed its name to Reliance Delhi Power Private Limited in February 1995. Later, it changed its name to Reliance EGen Private Limited in January 2004, to Reliance Energy Generation Limited in March 2004, and to Reliance Power Limited in July 2007. The company website identifies project sites broadly to be located in western India (12,220 MW), northern India (9,080 MW) and northeastern India (4,220 MW) and southern India (4,000 MW). They include six coal-fired projects (14,620 MW) to be fueled by reserves from captive mines and supplies from India and abroad, two gas-fired projects (10,280 MW) to be fueled primarily by reserves from the Krishna Godavari basin

(the "KG Basin") off the east coast of India, and four hydroelectric projects (3,300 MW), three of them in Arunachal Pradesh and one in Uttarakhand. MPP (Ultra Mega Power Project)

Krishanapatnam UMPP - 3960MW------------------Under Construction Sasan UMPP - 3960MW------------------Under Construction Tilaya UMPP - 3960MW

Other Thermal & Gas Based Power Project

Samalkot Gas power plant - 2400MW------Under Construction Rosa power plant - 1200MW-------------Operational Goa power project - 40MW--------------Operational Hisar Power project - 1200MW---------Operational (EPC) Dadri power plant - 8000MW------------------Shelved Chitrangi power project - 4000MW--------------Under Construction Butibori power project - 600MW--------------Under Construction

Renewable Energy Based Power Project

Wind Power Projects - 40MW------------Operational Dhirubhai Ambani Solar Park - 40MW--------Operational Hydro Power Projects - 2500MW

Order to Shanghai Electric Anil Ambani placed a single order for $8.3 billion with Shanghai Electric Co Ltd (SEC) for buying 36 coal-fired thermal power generation units, spare parts and related services over a 10year period. This took the total deal size between Reliance Power and the Chinese power equipment maker over the past couple of years to $10 billion, making it the largest contract

between a private Indian company and a government-owned Chinese firm. While Reliance Power has also given a $2.2 billion deal to USbased General Electric, the agreement signed with SEC is on a different plane. The Chinese company will supply boiler, turbine and generator packages for up to 30,000 MW capacity of coalbased power at six plants, including the ultra mega power project at Krishnapatnam, the 5,940-MW project in Chitrangi, and the 3,960-MW project in Tilaiya. Loans from Exim bank Reliance Power Ltd. signed an agreement with the U.S. ExportImport Bank Saturday for a $5 billion loan to finance power projects. The loan will finance 900 megawatts of renewable technologies such as solar and wind energy, as well as up to 8000 MW of gas-based power generation technology, the Indian company said in a statement. This $5 billion agreement is in addition to the $917 million already approved by the Ex-Im Bank for Reliance Power's coal-fired power plant at Sasan in central India. The agreement will allow Reliance Power access products and services at competitive rates and help create manufacturing and services jobs in the U.S. The loan will also enable quicker access to the bank's long-term dollar loans. Reliance Power signed a pact with the U.S's General Electric Co. (GE) worth INR100 billion ($2.2 billion) to implement a 2400 MW power plant. The plant will be located in the southern Indian town of Samalkot and the pact was signed during the visit of President Barack Obama. Initial public offering and controversies On January 15, 2008, the company attracted $27.5 billion of bids on the first day of its initial public offering (IPO), equivalent to 10.5 times the stock on offer, thereby, creating India's IPO

record. The upper cut off price for the bid was Rs. 450 The proposed IPO was to fund the development of its six power projects across the country whose completion dates are scheduled from December 2009 to March 2014. A media report suggested that, if the companys stock price were to cross Rs. 650-700, Anil Ambani would go past L. N. Mittal to become the richest Indian.[7] "It is a reflection of world community in the future of India... Investors seem to be confident in the future of Indian economy," Indian Finance Minister, P. Chidambaram told the media about the IPO The Securities and Exchange Board of India, which is an organization that regulates the activity in the Indian stock market, placed some restrictions based on a complaint about the formulation of the IPO The complaint also resulted in a public interest litigation being filed against the company. However, the Supreme Court of India passed a ruling that the IPO would go ahead even if any order is passed by any Indian court against the venture. Reliance Power debuted on the stock markets on February 11, 2008. However, the markets were still reeling after the January 2008 stock market volatility, and concerns over speculation that the issue was overpriced sent the stock plummeting soon after its listing. At the end of the day, the stock traded at a value that was 17 per cent lower than its issue price of Rs. 450 .[11] Investors who were betting on the stock reaching 1.5 or even twice its issue price lost a fortune in the process. On February 25, in an effort to mitigate investor losses, Reliance Power decided to issue 3 bonus shares for every 5 shares held. Carbon credits On February 2, 2011 United Nations registered Reliance Power's Sasan Power Plant to be eligible for earning carbon credits followed by Krishnapatanm Ultra Mega Power Project and Tilaiya Ultra Mega Power Projects. United Nations issues

carbon credits to companies which employs advanced technologies in reducing carbon emission . These carbon credits can then be sold to those companies that are emitting more than their statutory emission limits Reliance Power IPO from billionaire Anil Ambani-led group may have generated highest demand, but its listing premium could only be ranked the lowest after DLF among 10 major IPOs since elder brother Mukesh's Reliance Petroleum made its debut on the bourses in 2006. At a price of Rs 547.8 per share, Reliance Power got listed at a premium of about 21 per cent, as against about 70 per cent that Reliance Petroleum got at its listing on May 11, 2006. Both the brothers have gone for IPOs on only one group firm so far since the family settlement in June 2005. DLF of K P Singh possibly got the lowest premium of below 11 per cent over an issue price of Rs 525 a share, but the real estate giant currently figures among the top ten most valuable firms with its share price having nearly doubling since its listing in July last year. The response was top-most at a premium of 75 per cent over the issue prices for shares of Edelweiss Capital, Religare Enterprises and Mundra Ports and SEZ. However, in the case of Reliance Power, the retail investors could take a comfort from the concessional price of Rs 430 on which the listing premium would come to over 27 per cent as against 21 per cent over the issue price. While pointing out that this possibly could be the lowest listing premium for any Reliance company till now, the analysts said that what is commendable is that Reliance Power was holding near the issue price level despite the turbulence in the market that also saw shelving of two major IPOs, Emaar MGF and Wockhardt Hospital, only last week.

Though the Reliance Power IPO witnessed huge investor interest and was fully subscribed within first few minutes of its book building process, it could not sustain the momentum in Monday's listing and dipped below its issue price. Reliance Power IPO was subscribed over 73 times while Mukesh Ambani-led Reliance Petroleum IPO was subscribed over 51 times. Reliance Petroleum received bids for over 2,309 crore (230900 million) shares as against 45 crore (450 million) shares on offer, while Reliance Power received bids for 1,665 crore (16650 million) shares for 22.80 crore shares (228 million) on offer. Besides, Reliance Industries the flagship firm of Mukesh Ambani group had come out with its initial public offering nearly three decades ago and since then the company has held massive investor confidence. Among the top 10 major listings shares of Kishore Biyani-led Future Capital Holdings, which raised about Rs 490 crore (Rs 4.9 billion) through its initial public offering surged over 36 per cent over its issue price on debut trade at the BSE. The company commanded a market capitalisation of about Rs 5,750 crore (Rs 57.50 billion) in its first day on the bourses. Similarly, brokerage firm Edelweiss Capital, Financial services provider Religare Enterprises and Adani group-promoted Mundra Port and Special Economic Zone Ltd (MPSEZL) witnessed huge response from investors. All the three firms surged as much as 75 per cent on their debut on the Bombay Stock Exchange.

ISSUE OF BONUS SHARES

Reliance Power Ltd has announced that the Board of Directors of the Company at its meeting held on February 24, 2008, has approved a proposal for issuing free bonus shares to all categories of shareholders, excluding the promoter group (comprising of Reliance Energy Ltd. and the ADA Group), in the ratio of 3 shares for every 5 shares held, subject to necessary approvals. The proposed bonus offering will result in reduction of the cost of Reliance Power shares below the IPO price as follows: Rs 269 per share for retail investors, 40% lower than the IPO price of Rs 430. Rs 281 per share for other investors, 37% lower than the IPO price of Rs 450.

COMPARISION WITH OTHER IPO

The Anil Ambani-controlled Reliance Power opens for stock subscription in the Rs. 405-Rs 450 range. 9.56 am: History is created the stock is oversubscribed. By evening the Rs. 11,600-crore issue is oversubscribed a staggering 10.55 times. And its still three days to go Reliance Power is by far the largest initial public offering ever in India, dwarfing realty major DLFs Rs. 9,188-crore issue. Reliance Power, when it lists on the stock exchange, is likely to substantially raise Anils personal wealth. If the stock lists above Rs. 700, as it is widely expected to do, it would catapult Anil to the top of Indias rich league, well past elder brother Mukeshs Rs. 2.48 lakh crore net worth.

But theres more to the share issue than that. Reliance Power is representative of a whole a new league of mega public offerings in India. The DLF offering was considered a paradigm-changing one. Within seven months, Reliance Power makes it seem like a drop in the ocean. Waiting in the wings is Bharat Sanchar Nigam Ltd. The telecom majors initial public offering of Rs. 40,000 crore for a mere 10 per cent of the company is set to make Anils stock issue look like small change. Meanwhile, State Bank of India is planning to issue shares worth Rs. 16,700 crore to existing shareholders at a fixed price. This, too, will dwarf Reliance Powers issue. No wonder then, Union Finance Minister P. Chidambaram couldnt contain his elation. It is a reflection of what the world community thinks about the future of India..., he said about Reliance Power, the first time he has commented on a public issue. Other mega issues expected soon are Reliance Infocomm, Oil India, UTI Mutual Fund, National Hydro Power Corporation and Rural Electric Corporation.

OFFER DETAILS

Issue Open Date 15/01/2008 Issue Close Date 18/01/2008 Listing Date 11/02/2008

Face Value (Rs). 10.00 Offer Price/Range (Rs). 0.00-0.00 Issued at (Value) Premium(440.00)

Issue Size(Retail) [email protected]/share Issue Type Public Issue (Book Building) LISTING DAY DATA Open 548.00 High 600.00 Close 373.00 Low 355.00 Volume Rs. 26402751247.00 RETURN ON OFFER PRICE

LISTING PRICE *Holding Period Return 76.59% 80.76% Holding Period (Days) 1642 1618 Annual Returns 17.02 % 18.22 % *NOTE : Holding Period Return calculation on basis of 365 Days

BONUS SHARES The Board of Reliance Power on Sunday approved a proposal for issuing bonus shares to all categories of shareholders, excluding the promoter group (comprising the Reliance Energy Limited and the Anil Dhirubhai Ambani Group), in the ratio of 3 shares for every 5 shares held. This announcement came in a short span of time (just 10 trading days) since the company was listed on the stock exchanges on February 11, 2008, which saw a steep fall in its share price by 11 to 15 per cent compared to its initial offer price. The offer will reduce the cost of Reliance Power shares below its Initial Public Offer (IPO) price: Rs.269 per share for retail investors, 40 per cent lower than the IPO price of Rs.430; and Rs.281 per share for other investors, 37 per cent lower than the IPO price of Rs. 450.

Voluntary contribution

In a related development, Anil D. Ambani, Chairman, Reliance ADA Group, announced a voluntary contribution of 2.6 per cent of his shareholding in Reliance Power to the Reliance Energy Limited to protect the company from any dilution of its existing 45 per cent stake in Reliance Power, as a result of the bonus proposal. Reliance Energys stake will be maintained at 45 per cent.

Public shareholding
In the revised shareholding pattern, Mr. Ambanis holding in Reliance Power gets reduced from 45 to 40 per cent, Reliance Energys holding maintained at the same level of 45 per cent and the shareholding of the public has increased from 10 to 15 per cent. The reduction of Mr. Ambanis shareholding represents a contribution of nearly Rs. 5,000 crore by him in favour of nearly 6 million investors in Reliance Energy and Reliance Power. Based on the proposal for issuance of bonus shares, the paidup capital of the company will stand increased to 239.7 crore equity shares of Rs.10 each.

ANIL AMBANI Career

Ambani, founder of largest Indian conglomerate Reliance Group.[4] He is a member of the Board of Overseers at the Wharton School of the University of Pennsylvania. He is also the member of the Board of Governors of the Indian Institute of Technology Kanpur; Indian Institute of Management, Ahmedabad.[citation needed] He is a member of the Central Advisory Committee, Central Electricity Regulatory Commission. In March 2006, he resigned. He is also the Chairman of Board of Governors of DA-IICT, Gandhinagar.[5]

Ambani joined Reliance Industries, the company founded by his late father Dhirubhai Ambani, in 1983 as Co-Chief Executive Officer and is credited with having pioneered many financial innovations in the Indian capital markets.[citation needed] For example, he led India's first forays into overseas capital markets with international public offerings of global depositary receipts, convertibles and bonds. He directed Reliance in its efforts to raise, since 1991, around US$2 billion from overseas financial markets; with a 100-year Yankee bond issue in January 1997 being the high point, after which people regarded him as a financial wizard[citation needed]. He along with his brother, Mukesh Ambani, has steered the Reliance Group to its current status as India's leading textiles, petroleum, petrochemicals, power, and telecom company.[citation needed][citation needed] He is a close friend of movie star Amitabh Bachchan and Subrata Roy. One of his major achievements in the entertainment industry is the takeover of Adlabs, the movie production to distribution to multiplex company that owns India's only dome theatre and the recently announced joint venture worth US$ 825 million with Steven Spielberg.[citation needed] He has been embroiled in a dispute with his brother, Mukesh Ambani, over the supply of gas from the latter's KG basin.[citation
needed]

He recently topped Business Sheet's "world's biggest loser" list of business leaders who lost money in the late 2000s recession,[6] losing $32.5 billion in 2008, which brought him out of the top ten list to number 34 in 2009. Awards and recognition

Voted the 3rd most powerful person in India in the 2009 India Today Power List, in March.[7] Voted Businessman of the Year 2006 by Times of IndiaTNS poll[8] Adjudged as the CEO of the Year at the prestigious Platts Global Energy Awards for 2004. Voted as 'MTV Youth Icon of the Year for 2003' in September 2003. Conferred 'The Entrepreneur of the Decade Award' by the Bombay Management Association, October 2002.[citation
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Awarded the First Wharton Indian Alumni Award by the Wharton India Economic Forum (WIEF) in recognition of his contribution to the establishment of Reliance as a global leader in many of its business areas, December 2001. Conferred the 'Businessman of the Year 1997' award by India's leading business magazine Business India, December 1997.[citation needed]

Personal life Anil Ambani is Gujarati Indian. He is married to Indian Bollywood Actress Tina Munim and has two sons Jai Anmol and Jai Anshul.[9] He has taken part in the Mumbai Marathon race. Ambani is also a fan of Premier League club, Newcastle United and was extremely close to buying the club in September 2008. In June 2004, Anil was elected as an Independent Member of the Rajya Sabha - upper house of the Parliament of India. He is a vegetarian.