No threat to Reliance Power IPO: ADAG

Reliance Power is awaiting the approval of market regulator SEBI, says a spokesperson for the group amid reports that the mega issue could be delayed. There is no change in the plan to take Reliance Power public, says the Anil Dhirubhai Ambani Group (ADAG), amid media reports that the blockbuster IPO could be delayed.

"There is a vicious campaign of disinformation underway by vested industrial interests to stall Reliance Power's IPO", says a spokesman for ADAG. "The campaign is motivated by frustration at continuing success and rising valuations of ADAG," he adds.

Reliance Power is awaiting the approval of the market regulator SEBI for the IPO, he says. The company plans to sell a 10.1% stake through the IPO, which is estimated to raise US$2.8bn, making it India's biggest IPO ever. However in the past few days, there have been reports and market rumours that the issue may get postponed amid opposition from several quarters. A financial newspaper reported on Oct. 20 that the Ministry of Corporate Affairs is likely to refer the complaints received on the Reliance Power IPO to SEBI.

Another business daily reports that certain shareholders of Reliance Energy Ltd., the parent of Reliance Power, are against the issue saying that it will erode their shareholder value. They also allege that the proposal to transfer all projects from Reliance Energy to Reliance Power has not been taken to the shareholders.

An association of investors of Reliance Energy claim they have been deprived of the entire power generation business prospects. By transferring the power generation business to Reliance Power, now the power generation profits will accrue to the new company, they add. Investors in Reliance Energy are feeling cheated, they say.

But a spokesperson for Reliance Energy has refuted the charge that there is any irregularity in the company having transferred these power generation projects to Reliance Power without the consent of the shareholders.

Up to 30% of the Reliance Power shares will be offered to retail clients, with a further 10% going to high net worth individuals. Institutional investors will be offered 60%, and may get the chance for more if retail demand is weak.

The issue will be managed by UBS, ABN AMRO, JPMorgan, Deutsche Bank, Enam Securities, ICICI Securities, JM Financial and Kotak Mahindra Capital, while Macquarie India and SBI Capital Markets are co-managers

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