Monday 25 February 2008

Reliance Power Bonus - 3 shares for every 5 shares held

Anil Ambani-promoted Reliance Power shareholders, who were battered on the listing day of the scrip, effectively reduced their losses by as much as 40% over the IPO price after the company announced the bonus issue on Sunday.

The board of directors at its meeting considered and approved a bonus issue, excluding promoters, wherein three shares would be allotted for every five held by the non-promoter shareholders.

"This move would effectively reduce the cost of Reliance Power shares from the IPO price," Reliance Power Chairman Anil Ambani said. Retail investors were allotted the shares at Rs 430 while institutional investors got it at Rs 450.

ursuant to this bonus issue, retail shareholders would receive the shares at Rs 269 each while for institutional shareholders, it would be Rs 281 per share.

"Compared to the IPO price, for the retail investors it represents a reduction of 40 per cent and for institutional 37 per cent," Ambani added.

The bonus issue follows the dismal opening of Reliance Power at the stock exchanges. The scrip, after listing at Rs 547.8, slid within a minute and closed at Rs 372.5, a level much below the issue price.

Reliance Power scrip closed at Rs 416.85, down 1.21 per cent on Friday at the BSE.

On February 20, the company said it had asked its shareholders to make balance payment by February 26 on shares allotted to them in the IPO to be eligible for bonus shares.

Reliance Power's IPO had offered a discount to retail investors, and an option of staggered payment to all segments.

The record date for the bonus shares would be fixed in consultation with stock exchanges and in compliance with provisions of the listing agreement, the firm added.