Reliance Power to give 3 bonus shares for every 5 shares held

Reliance Power to give 3 bonus shares for every 5 held

Anil Ambani-promoted Reliance Power on Sunday said it will give three bonus shares for every five shares held by its shareholders.

The board of directors at its meeting today considered and approved a bonus issue excluding promoters, as per which three shares would be allotted for every five held.

This issue would benefit over four million investors in the company and the cost would be borne by the promoter group by way of diluting its stake.

Post bonus issue, the cost of acquisition of Reliance Power shares would come down to Rs 269 for retail shareholders and Rs 281 for institutional investors.

Saying that retail investors are the bedrock and foundation of Reliance Power, its Chairman Anil Ambani said: "In these two weeks, the number of retail shareholders have actually increased. In these 10 trading days, retail investors have acquired 2.5 crore shares."

The approval of bonus issue is an unprecedented step in the history of capital market in India and abroad, he added.

Shares of Reliance Power closed down by 1.21 per cent on Friday at Rs 416.85 on the Bombay Stock Exchange.

 

Rel Power bonus issue cuts shareholders' losses by 40%

Anil Ambani-promoted Reliance Power shareholders, who were battered on the listing day of the scrip, effectively reduced their losses by as much as 40% over the IPO price after the company announced the bonus issue on Sunday.

The board of directors at its meeting considered and approved a bonus issue, excluding promoters, wherein three shares would be allotted for every five held by the non-promoter shareholders.

"This move would effectively reduce the cost of Reliance Power shares from the IPO price," Reliance Power Chairman Anil Ambani said. Retail investors were allotted the shares at Rs 430 while institutional investors got it at Rs 450.

 Pursuant to this bonus issue, retail shareholders would receive the shares at Rs 269 each while for institutional shareholders, it would be Rs 281 per share.

"Compared to the IPO price, for the retail investors it represents a reduction of 40 per cent and for institutional 37 per cent," Ambani added.

The bonus issue follows the dismal opening of Reliance Power at the stock exchanges. The scrip, after listing at Rs 547.8, slid within a minute and closed at Rs 372.5, a level much below the issue price.

Reliance Power scrip closed at Rs 416.85, down 1.21 per cent on Friday at the BSE.

On February 20, the company said it had asked its shareholders to make balance payment by February 26 on shares allotted to them in the IPO to be eligible for bonus shares.

Reliance Power's IPO had offered a discount to retail investors, and an option of staggered payment to all segments.

The record date for the bonus shares would be fixed in consultation with stock exchanges and in compliance with provisions of the listing agreement, the firm added.