Monday, February 11, 2008

Reliance Power IPO - Listing

Reliance Power got listed today and fell flat on its face shattering many investors hopes. Reliance Power listed at Rs 430 versus its issue price of Rs 450; it showed a disappointing and unexpected opening. In any of the polls conducted by numerous TV channels, no one expected the stock to list below the issue price. This was being considered as a signal for a uptrend in the market. However, because of the dismal listing today, it also became one of the causes for market crashing with sensex closing more than 800 points down.

Now, lot of brokers polled are saying that the correct price should be around Rs 300. Investors from all segments were selling the stock which caused the stock to close at Rs 372. Lot of investors especially in the HNI and QII segment have lost huge money as they had taken loans for subscription. They have to bear not just the loss in price but also the interest cost on loan.

The stock may bounce back but considering the volatility in secondary markets, it looks like the stock is headed for rocky times ahead. Moreover, since it does not expect cash flows until 2013, investors are looking at other options like NTPC which is providing more value than Reliance Power at its current price.

Click this link on 11th Feb to see the Reliance Power IPO listing and performance.

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