For lakhs of investors who’ve seen a 21.5 per cent fall in the Sensex since January 10 this year, the Reliance Power listing on Monday was a big disappointment. The listing was a disappointment for the Anil Dhirubhai Ambani Group (ADAG), too, as the market capitalisation of ADAG came down by Rs 50,000 crore to Rs 3,03,300 crore (including Reliance Power).“We are naturally disappointed that the Reliance Power stock closed lower than the IPO price on the first day of listing,” said a Reliance Power spokesperson. RPower, which even commanded a price of Rs 1,000 in the unofficial grey market, was listed at Rs 547.8, a premium of 21 per cent over the issue price of Rs 450. It slipped into the red within a minute and lost its position from the group of top 10 valuable entities on the market. The stock went down further in huge volumes and closed 17 per cent down at Rs 372.50 on the BSE. Nearly 20 crore RPower shares were traded on both the BSE and the NSE.“The listing of RPower proved to be a near fiasco. The stock failed to impress investors who booked profits amid volatility. High net worth investors and the overvaluation of the stock spoiled the party further,” said a broker.Experts said the premium at which Reliance Power was listed could possibly be the lowest for any Reliance group company. They said the stock held near the issue price level at a time when two major initial public offers, Emaar MGF and Wockhardt Hospital, were shelved only last week. Marketmen had initially expected the RPower price to double on debut, but stock market turmoil had lowered investor risk appetite and expectations were toned down subsequently with marketmen expecting a premium of about Rs 75-150 above the IPO price on debut. Even this was proved wrong. “Poor RPower listing and withdrawal of two IPOs have given a big blow to the primary market,” said BSE dealer Pawan Dharnidharka.Lalit Thakkar, director of research at Angel Broking, said, “All the froth that was created in the primary market is now cleared, with the listing of Reliance Power. At Rs 450, the stock was expensive. We believe investment in Reliance Energy at Rs 1600, which holds 45 per cent in Reliance Power, is a much better bet.” However, the ADAG group put a brave face. “The decline is not specific to Reliance Power and instead mirrors the sharp meltdown in global capital markets over the past three weeks. From the time of our IPO, the Sensex is down 20 per cent today, while the Reliance Power stock is down 17 per cent from the IPO price. We are confident of delivering superior long-term returns to our shareholders,” said a Reliance Power statement. The company entered the capital markets with an equity issue of 26 crore shares, of which retail investors contributed 6.84 crore shares and the high net worth individual (HNI) contributed 2.28 crore shares, subscribing the issue around 77 times. Retail investors took comfort from the concessional price of Rs 430.
