REL board to take up power IPO today

Mumbai, Sep 29 | Updated: Sep 30 2007, 10:01am hrs
Anil Ambani Group's Reliance Energy is expected to decide today whether to take public its subsidiary Reliance Power Ltd in an issue estimated at $2-3 billion. The move can value the company at over $20 billion. The board of Reliance Energy will meet to "consider every opportunity for growth and unlocking of shareholders' value", the company said in a statement to the stock exchanges.

The IPO for Reliance Power, which recently bagged the 4,000-mw Sasan power project, is considered to be part of revenue mobilisation exercise for its estimated Rs 1,00,000 crore investment plans. The meeting follows reports that the company was looking at an initial public offer of 2$-3 billion (up to Rs 12,000 crore) shortly.

According to sources, over half a dozen bankers, including Kotak, Enam, JM Financial and UBS were reportedly involved in the deal, but none of them could be contacted for confirmation. When contacted, an REL spokesperson said, "as a matter of policy we would not like to comment on speculations."

Besides Sasan project, Reliance Power is believed to be working on power projects totaling 25,000 mw. REL shares scaled a new life-time peak of Rs 1,220 earlier on Friday and settled nearly 8% up. The IPO is believed to be the largest ever in the Indian stock market exceeding the size of realty giant DLF's recent IPO that raised close to Rs 9,000 crore.

If it goes through, the public issue will give Reliance Power an initial market capitalisation of about $20 billion (Rs 80,000 crore) and place the company among top 20 most valued firms listed on the domestic bourses.