SINLetter Investment Forums / The World Is Your Playground / Investing in India

Power(ful) IPO

sinnerJi — Mon, 14 Jan 2008 09:48:32 GMT

The much awaited Reliance Power IPO starts Jan 15th and runs till Jan 18th. After going through
many uncertainties and a long tussle with the SEBI (the SEC equivalent in India) the IPO is all set to go and
is touted to be the largest in the history of the Indian stock market expected to generate Rs 11,700 crore by offering shares of Rs.10 at a premium of Rs.415 to Rs.450.

Off the total IPO, 9.95 percent is being offered to the public, while the rest will be split equally between the
promoters, Reliance Energy and AAA Projects.

Another interesting aspect of this IPO is that investors need to pay only Rs 150 on application and can pay the rest after allotment. Also a five per cent discount is being offered to retail investors.

The stock is slated to be listed on the Bombay Stock Exchange (BSE) in early february and that should offer a good arbitrage opportunity between stocks of Reliance Power and its parent company Reliance energy as being discussed here.

Apparently NRIs can participate in this IPO.

The impact of this IPO can be described no less than in the words of Reliance Anil Dhirubai Ambani Group chairman Anil Ambani.

[quote]The Indian capital market is near all-time high and there would not have been a better time to create history. [/quote]

On cloud 19

sinnerJi — Mon, 15 Oct 2007 13:21:07 GMT

The Bombay Stock Exchange (Sensex) continued its relentless surge and breached the 19000 mark (and closed at 19,058.67) in less than a week after it crossed the 18000. Just to give you an idea of how rapidly this index has risen here is a 5-yr comparision of the BSE with the Dow Jones and NASDAQ. Its almost unthinkable that the market was at 2834 just 5 years ago.

Comparision between BSE/Nasdaq/Dow Jones:

http://in.finance.yahoo.com/q/bc?t=5y&s=%5EBSESN&l=on&z=m&q=l&c=&c=%5EIXIC&c=%5EDJI

BSE:

http://in.finance.yahoo.com/q/bc?s=%5EBSESN&t=5y&l=on&z=m&q=l&c

Snapshot taken after trading hours on Monday 15th October 2007:

IPO Boom - Like that

sinnerJi — Wed, 10 Oct 2007 07:04:17 GMT

The benchmark Bombay Stock Exchange 30-share sensitive index (Sensex) broke through the 18000-mark on Tuesday with the largest single day gain of 788.85 points. This is also the second fastest 1,000 point increase (taking just nine trading sessions), the fastest 1,000 point rally was not too long ago when it moved from 16000 to 17000 in six trading sessions on September 26.

However only on the day before i.e on Monday October 8th, the markets seemed jittery and closed at 17491.39 on fears of a mid-term poll owing to the political instability. The way the market bounced back in a day, having seemingly corrected itself for the political drama or blindly ignoring it, is reminiscent of the scenes that prevailed before the stock market crash of 2000 following the IT bubble burst. Looking at today's IPO scene reminds me of that period when IPO's ruled the roost and enjoyed hefty premiums too. But in the aftermath of the crash many of these stocks vanished into thin air.

Looking at the volatility of today's markets and high premiums that are associated with the IPO's it would be prudent to throw caution to the wind and book profits after the stocks get listed than to hold, unless they are some really good companies, which have been performing great after listing, like Take Solutions, Motilal Oswal or Power grid corporation or the upcoming Reliance Power IPO which is touted to be the largest Indian IPO looking to generate a market cap of Rs.12,000 crores.

Convergence - Now trade in US stock markets from India

sinnerJi — Wed, 10 Oct 2007 04:52:21 GMT

You can now trade in equities listed on the U.S. stock market, thanks to ICICIDirect.com, an online portal launched in association with Penson Financial Services of the U.S, following the Reserve Bank of India's guidelines allowing investments upto $200,000 annually. You can read about it more here.

This is a great opportunity for ex-NRI's like me (and I am sure there would be lot many) who follow the U.S. markets and would like to invest in them.

Sign of things to come?

sinnerJi — Fri, 28 Sep 2007 04:45:37 GMT

Update on 10/30/2007:

Two more milestones achieved. The BSE crossed the 20,000 barrier during intra-day trade and Mukesh Ambani is now the richest man in the world, surpassing Bill Gates, Carlos Slim Helu and Warren Buffet. As a result of stellar performance of Reliance group companies like Reliance Industries, Reliance Industrial Infrastructure and Reliance Petroleum the net worth of the Reliance group chairman grew to 63.2 billion dollars. Whereas the net worth of both Gates and Slim is estimated a little above 62.9 billion dollars each, with slim having a slight edge over Gates.

Original Post:

Spurred by the recent buoyancy in the US markets as a result of the rate cuts the Indian markets soared to a all time high on Friday (28th Sept) breaking all previous records. The BSE registering 17,343.98 and the NIFTY 5,043.05 thanks to Foreign Institutional Investors (FIIs) pumping in $3.66 billion in the last five days.

All these numbers brought out another interesting statistic. Reliance Industries Chairman, Mukesh Ambani has become the richest Indian in the world, overtaking steel tycoon Lakshmi Mittal.

Mr. Ambani’s net worth has soared past $50 billion, based on the closing share prices of various group companies like RIL, Reliance Petroleum, IPCL and Reliance Industrial Infrastructure in which he is estimated to have held shares worth $50.1 billion through promoter holdings, making him the first Indian and fourth person in list of people to have a wealth higher than this amount. He is now next only to Bill Gates, Mexican business baron Carlos Slim Helu and Warren Buffet.

With never before seen bullishness in the markets and a bright economic outlook, the next correction should be a good buying opportunity and midcaps like Reliance Petroleum (RPL) and Tata TeleServices (TTML) look lucrative even at present levels.