CRISIL has assigned a CRISIL IPO Grade ?4/5? (pronounced ?four on five?) to the proposed initial public offer (IPO) of Reliance Power Ltd (RPower), the company from the stable of Reliance Anil Dhirubhai Ambani Group (Reliance ADAG). This grade indicates that the fundamentals of the issue are above average, in relation to other listed equity securities in India.
RPower proposes to come out with a public issue of 26 crore equity shares of face value Rs 10 targeted at an issue size in the range of Rs 10,500 crore to Rs 11,500 crore.
In a statement issued on Monday, CRISIL said, the IPO grading assigned reflects the agency?s view that strong demand for power in India will catalyse regulatory facilitation for private participation in the power sector over the medium to long term.
In this scenario, early movers like RPower will benefit from attractive business opportunities that are likely to come about as a result, especially if they achieve high levels of financial capability, as is likely for RPower after its proposed IPO, it said. CRISIL said, the grading also reflects the Reliance Anil Dhirubhai Ambani Group (Reliance ADAG)?s commitment that RPower will be the sole repository of the group?s economic interest in the power generation segment. The grading is tempered by the fact that RPower is planning to put up capacity, on a scale and within a time frame, never achieved in India before and therefore it is likely to face implementation challenges.