One of the leading companies in the power sector of India, the Reliance Power has decided to offer three bonus shares to its investors for every five held very soon. The company officials have stated that the decision has been taken as a part of its endeavour to compensate the fall that it had in its share price after its high decibel, record-breaking initial public offering in the last month. The officials also said that the promoters of the company that is Mr. Anil Ambani, the Chairman of the company, and Reliance Energy (REL) will not be offered the bonus shares. Mr. Ambani is currently holding a 45 per cent stake in Reliance Power.
According to the sources, Mr. Ambani is going to reduce his holding in the company for preserving RELs shareholding at 45 per cent and also to keep the notional loss that REL would suffer on account of the bonus issue. While talking about the matter, Mr. Ambani said, "I am contributing my personal shareholding of 2.6 per cent in Reliance Power to Reliance Energy". He also informed that the boards of the companies has also approved the free issue of shares.
The sources said that the bonus issue offer will effectively reduce the share price of Reliance Power by about 40 per cent to Rs 269 for the retail investors, who paid Rs 430 a share. The price would also come down by 37 per cent to Rs 281 for the institutional investors. The sources from the industry added that the IPO of the company did attract an amount of Rs 7,50,000 crore worth of bids and raised Rs 11,500 crore for the company. They said that a large number of investors did also borrow funds for the IPO with a hope to make a profit from the listing premium. However, the investor anxiety at the company predictably ran high, when the IPO listed below its issue price on 11th February and continued to remain below it ever since.
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| Posted : 2/26/2008 |
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