The Securities Appellate Tribunal (SAT) has admitted the petition filed by Rajkot Saher/Jilla Grahak Suraksha Mandal (RSJGSM), a Sebi registered investor association, challenging the opening of the bidding of the mega initial public offering (IPO) of Reliance Power Ltd (R Power) on January 15. However, the SAT refused to give a stay on the opening of the bidding of the IPO, which is scheduled to open for subscription on January 15.
SAT said that the case will be admitted. ?The case needs to be disposed off in the initial stage itself. The case will be heard on January 14 and a final order will be passed in this regard,? the three-member tribunal said.
Participating in the argument, the lawyer of RSJGSM said that to circumvent the higher promoter contribution, promoters have undervalued the merged entity.
The promoters of R Power should have actually contributed around Rs 21,600 crore in the company whereas they have contributed only Rs 2,000 crore in the power company.
He said that a large body of the investors will be effected with the opening of the IPO and sought a stay on the bidding process of the IPO, which begins on January 15 and closes on January 18.
The lawyers of RPL has countered the arguments made against the announcement of the IPO bidding process.
