Indian Stock Market

Reliance Power IPO Reliance Power IPO Analysis

Reliance Power IPO date has been announced and opens on Jan 15 2008.

Reliance Power Limited IPO which would be one of the biggest IPO in Indian stock markets is the most anticipated IPO in 2008.

The net issue to the public would be 114 crore equity shares after the promotors contribution of 16 crore equity shares.Reliance Power IPO will constitute 11.5% of the post issue paid-up capital of the company and the net issue will constitute 10.1% of the post issue paid-up capital of the company.

UBS is valuing Reliance Power between Rs 71,800-92,100 crore and says that Reliance Energy’s 50 per cent shareholding in Reliance Power is worth Rs 35,900-46,100 crore. This translates into another Rs 1,571-1,995 for every share of Reliance Energy.

Analysts also see big value in the Reliance Power IPO. UBS says that the cost of capital for Reliance Power would be 20 per cent less than NTPC. It also believes that the gas supply dispute will be resolved and sees no single risk to fuel supply.

It also views that Reliance Power is positioned to win upcoming UMPP projects. However, there are some risks associated with Reliance Power future business.

UBS says that gas allocation and pricing needs to be monitored closely and if rules prevent, carbon credit trades from gas-based plants could affect revenues.

Analysts say share of private sector in power generation will increase from current 13 per cent to 20 per cent by 2017 and Reliance Power is all set to grab a big pie out of it as it has also plans to generate power from nuclear energy.

Reliance Power IPO Reliance Power IPO Analysis