Re: Truth of Reliance Power IPO - JANTA KO BEVAKOOF SAMAJAH RAKHA HAI
Haha, that time RIL was offered at Rs. 10, here it's being offered at 45X premium whereas most of the shares of Indian marketplace trade at around 20X premium even in the live secondary market... A stock being offered at 45X premium right in the primary market is way too much...
REL was launched 3 years back, and still its in the development phase... All its promises are still pending and the project is delayed.
R P L is a huge planning and the real time of implementation is far much much more as compared to REL. Still these projects are based on coal supplies from the coal mines and water to run the aspired hydro power projects... Both are scarce resource... Mind you... R P L is not initiating a nuclear power plant!
Moreover, I even doubt on the overall profittability of these power projects... They are impressive in terms of their envisioned sizes but aren't impressive in terms of ROI... Take the example of Powergrid... Its still hanging between 140 and 155 since long time... whereas most of the other frontline stocks that were in that bracked along with powergrid have appreciated impressively in last 2 months! Powergrid is lagging too much! And don't expect a jump up in powergrid because nothing breakthrough is going to happen with these power based project other than steady secured earnings IN THE FUTURE based on investments and that too in low profit margins!
Look for high profit margin sectors... there your money will grow even 10 folds...
Regarding reliance power, there's one simple question in my mind... ITS GOOD TO COLLECT 11000 CRORES FOR THE PROJECT THROUGH IPO.... BUT NOT FOR THE AMBANI BANDHUS... I SAY... GIVE SHARES TO PEOPLE AT PREMIUM, BUT 45X????
I say,, they could have even collected 11000 crores by offering 112 crore shares to general public for Rs.110 rather than 28 crore shares to public at 45X at Rs. 450 each!
In this IPO offer, its clearly visible that overall, share holding of Ambanis will by 200 crores whereas of people will only be 28 crores... Poor people... truly...
And I believe this IPO offer is not to just collect money for the project, but this is only to HELP AMBANIS REMAIN THE BIGGEST SHARE HOLDERS OF THE PROJECT FOR ALL TIMES TO COME!