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Reliance Power was the last big IPO of 2008 to have hit the markets when key equity indices Sensex and Nifty were trading at their historic peaks. Nearly 10 years after the debacle, which saw Reliance Power being thrashed on its listing, investors gave a thumbs up to another Anil Dhirubhai Ambani Group (ADAG) company.
The ₹1,540-crore IPO of Reliance Nippon Life Asset Management (RNAM) saw 81 times subscription on the last day of its closing on Friday, according to latest data. The figures could still rise when a final tally is announced by the bankers.
The anticipation that ADAG was expected to announce a phased exit from its flagship telecom business in the coming months after piling up of huge debt, did not dither institutional and retail investor bidders from enthusiastically participating in RNAM’s IPO.
Grey market premium “It is Nippon, the largest Japanese life insurance company, that attracted investors, and not ADAG,” said the research head of a leading brokerage in Mumbai. “Also, abundant liquidity in the stock markets is the reason for the overwhelming response.”
It was a 100 per cent grey market premium for Reliance Power IPO that lured investors to the issue in 2008. Brokers said RNAM was quoting at a modest 10 per cent premium in the grey market now. RPower received bids for a record $180 billion (₹7,10,000 crore or ₹7,100 billion) as the issue was subscribed 72 times. The shares which were initially priced at ₹400 in 2008 are now trading near ₹40 even after giving bonus.
By 5 pm, RNAM was subscribed 81.28 times, as investors put in their bids for over 348.23 crore shares against over 4.28 crore shares on offer. The retail quota was subscribed around 5.16 times, qualified institutional buyer (QIB) 118.41 times and non-institutional individual investor (NII) 209.44 times. At the upper end of the price band, RNAM is being offered at 37 times its FY2017 earnings a share and eight times its FY17 book value (pre-IPO), demanding ₹15,442 crore in market-cap, which is 6.8 per cent of the ₹2,28,329 crore assets the company managed as of August 31.
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