HC`s ruling may have spillover affect on Reliance Power IPO
The forthcoming IPO of Reliance Power, may not remain untouched by the Bombay high court`s order to Anil Ambani Group`s RNRL and Mukesh Ambani`s Reliance Industries (RIL) to rework a gas supply agreement, as Reliance Power`s two projects rely on gas supplies from RIL`s KG basin fields.
Reliance Power, a subsidiary of Reliance Energy that is seeking to raise up to Rs 120 billion through the public offering, has stated in its draft prospectus that it intended to get coal and gas for its two projects at a combined investment of over Rs 300 billion from RNRL.
The court asked Reliance Industries and RNRL to renegotiate within four months, a gas supply master agreement (GSMA) between them saying it has to be a `bankable` pact.
Reliance Power in its draft prospectus to SEBI has said that it has not arranged for `any alternative sources of coal or gas for the Shahpur Coal, Shahpur Gas and Dadri projects.` The draft further reads that `currently, RNRL does not have any right to coal resources of its own. In addition, RNRL is in litigation with respect to its gas reserves, which may impact the availability and pricing of the fuel for two gas-fired thermal projects`.
Shares of Reliance Energy gained Rs 211.05, or 12.9%, to trade at Rs 1,847.35. The total volume of shares traded was 2,724,401 at the BSE.(Monday).
