Reliance Power Stocks fall flat on its face on the first day of market listing
Amid tremendous expectations, Reliance Power Stocks or REPL stocks was listed in the Share market by Anil Ambani on Monday Feb. 11,2008. The listing price of the REPL shares was Rs 430 ( about Rs 20 less than the issue price of Rs 450). The REPL performed poorly right from the morning session of trade, disappointing the millions of investors who had in REPL stocks. The morning session saw desperate stock holders trying to gain marginal profits by selling off their shares. What shocked many was the price at which the stocks where listed (Rs 420). Many market experts expected the stocks to be listed at around Rs 550-600.
This poor performance came as a surprise to many after the records set by the REPL IPO( initial public offering). It was oversubscribed by 9X time the first day the IPO was opened. When the IPO was closed the stocks where over subscribed 72x times. It has the record for the largest subscription for an IPO n the global market. Crisil, a leading rating agency, had rated the IPO four out of five saying that the IPO was above average. This issue raises serious questions about the listing prices. Corporate houses are now afraid of entering the market. This week also saw Wockhardt Hospitals and Emaar MGF withdrawing their public offering fearing the current market situation.