The Hindu Business Line : RPL issue subscribed by 8 times

The range
Within 10 minutes, IPO gets response for over three times.
The issue has generated a demand for over Rs 22,000 crore worth shares on the first day itself.

CLAMOUR FOR MORE: Notwithstanding the sharp correction in the stock market indices in the last couple of days, there has been a huge demand for the application forms of Reliance Petroleum's IPO, which opened on Thursday - Mohammed Yousuf

Mumbai , April 13

Investors flocked in large numbers to bid for the Rs 2,790-crore IPO of Reliance Petroleum Ltd, subscribing the public issue by over eight times on the opening day on Thursday.

Company officials said the issue was subscribed over three times within 10 minutes of the opening of the issue.

Most of the investors placed their bids at the upper end of the price band of Rs 57-62, bankers to the issue said. Thus, the issue has generated a demand for over Rs 22,000 crore worth shares on the first day itself.

The company is entering the capital markets with a public issue of 135 crore equity shares of Rs 10 each, of which 90 crore equity shares would be subscribed to by parent, Reliance Industries Ltd, at Rs 62 a share, amounting to Rs 5,580 crore.

The net number of shares available to the public is 45 crore, of which 60 per cent is reserved for qualified institutional buyers.

Bankers said that retail investors would have the option of paying only Rs 16 a share on application for the IPO, which closes on April 20.

The mood was buoyant as the IPO opened a day after US oil major, Chevron Corp, said that it would buy five per cent stake in Reliance Petroleum for about $300 million, with an option to raise the stake further to 29 per cent, bankers said.

Though the stock markets were going through a downturn for the second consecutive day, it did not deter the investors putting their money in the issue, the biggest this year.

The issue is being made to part-finance the Rs 27,000-crore export-oriented refinery being set up in a special economic zone at Jamnagar in Gujarat.

The export-oriented refinery will have a capacity of processing 5,80,000 barrels a day, making it the sixth largest refinery in the world.

As a part of this project, it is also setting up a 900,000-tonne-a-year polypropylene plant. This is expected to go on stream by December 2008.