Mutual Funds- Dividends 18th Feb 2008

Reliance MF introduces exit load structure

Reliance mutual fund has announced the introduction of/ change in exit load in the following schemes:

 

Reliance regular Savings Fund (Equity Option and Balanced Option), Reliance Banking Fund, Reliance Diversified Power Sector Fund-Retail Plan, Reliance Pharma Fund, Reliance Media and Entertainment Fund, Reliance Growth Fund-Retail plan, Reliance Vision Fund-Retail Plan, Reliance Equity Opportunities Fund-Retail Plan, Reliance Equity Fund- Retail Plan and Reliance Equity Advantage Fund-Retail Plan.

 

According to the revised load structure the fund will charge for subscription of less than Rs 5 crore an exit load of 1% if the investment is redeemed/ switched on or before completion of 1 year from the date of allotment. The schemes should not charge an exit load if investment units are redeemed/ switched after completion of 1 year from the date of allotment. However, the scheme may not charge an exit load for subscription of Rs 5 crore and above.

 

The previously mentioned changes will be effective from 20 February 2008.

 

 

 

ICICI Prudential MF declares dividend

The ICICI Prudential mutual fund has announced the declaration of dividend under dividend option of ICICI Prudential Equity and Derivatives Fund -Income Optimiser Plan. The record date for dividend will be 22 February 2008.

The quantum of dividend is 6% i.e. Rs. 0.60 per unit on the face value of Rs. 10. The NAV of the scheme was recorded under institutional plan at Rs 10.93 and under retail plan was at Rs 10.89 as on 14 February 2008.

 

ICICI Prudential Equity and Derivatives Fund -Income Optimiser Plan is an open ended equity scheme, whose investment objective is to seek to generate low volatility returns by using arbitrage and other derivative strategies in equity markets and investments in short-term debt portfolio.

 

 

 

Birla Sun Life MF declares dividend

The Birla Sun Life mutual fund has announced the declaration of dividend under dividend option of Birla Sun Life Interval Income Fund- Quarterly Plan-Series III for its both retail and institutional plan. The AMC plans to distribute 100% of distributable surplus as on record date on the face value of Rs. 10. The record date for dividend is set as 21 February 2008.

The NAV of the scheme was recorded at Rs 10.1254 under retail plan and Rs 10.1231 under institutional plan as on 14 February 2008.

 

Birla Sun Life Interval Income Fund- Quarterly Plan-Series III is an interval income scheme with an objective to generate regular income through investments in debt and money market instruments.

 

 

 

DSP ML MF declares dividend

The DSP ML Financial mutual fund has announced the declaration of dividend under dividend option of DSP ML India T.I.G.E.R. Fund (The Infrastructure Growth and Economic Reforms Fund). The record date for dividend will be 22 February 2008.

The quantum of dividend is 50% i.e. Rs. 5.00 per unit on the face value of Rs. 10. The NAV of the scheme was recorded at Rs 27.945 as on 15 February 2008.

 

DSP ML India T.I.G.E.R. Fund is open ended growth scheme, whose primary investment objective is to seek to generate capital appreciation, from a portfolio that is substantially constituted of equity securities of corporates, which could benefit from structural changes brought about by continuing liberalization in economic policies by the Government and/or from continuing investment in infrastructure, both by the public and private sector.

 

 

 

Kotak MF launches new FMP

Name of Fund: Kotak Fixed Maturity Plan 14 month Series 3

Scheme: A close-ended bond scheme with tenure of fourteen months.

 

Investment Options: The scheme offers retail and institutional plan. The scheme offers investors growth option and dividend option under both the plans. The dividend option offers dividend payout and dividend re-investment facilities.

 

Objective: The objective of the scheme would be to generate returns through investments in debt and money market instruments with a view to significantly reduce the interest rate risk.

 

Fund Opens: 13 February 2008

Fund Closes: 21 January 2008

Face Value: Rs. 10

 

Minimum Investment Amount: The minimum investment amount under regular plan is Rs 5,000 and in multiples of Re 1 thereafter. The minimum investment amount under institutional scheme is Rs 50 lakh and in multiples of Re 1 thereafter.

 

Fund Manager: Mr. Deepak Agrawal

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Mutual Funds News - 18th Feb 2008

ICICI Prudential Emerging STAR - Adding to textiles, finance

ICICI Prudential Emerging STAR is a three-year-old, mid-cap focussed fund, but with a diversified basket of sectors and stocks. Although on a three-year CAGR basis, the fund has outperformed its benchmark Nifty Junior, its performance over the last year has been indifferent. Over this period, it has under-performed its benchmark considerably. With a portfolio of over 50 stocks the basket does appear diversified. Both the sector and stock preferences have been off the beaten track, vis-a-vis the choices of other diversified funds. In the October 2007-January 2008 period, the fund's corpus grew 2.4 per cent to Rs 917 crore, while the NAV grew 0.95 per cent to Rs 34.57. This may indicate a net inflow into the fund during these three months. In the January stock market correction, as with other midcap funds, the fund saw an over 20 per cent NAV erosion.

 

 

Sahara MF rolls out another FMP

Sahara Mutual Fund has rolled out a fund called Sahara Fixed Maturity Plans- 395 Days-Series 2 and it is a close-ended income scheme. The investment objective of the scheme is to generate income by investing into debt and money market securities, normally maturing in line with the time profile of the scheme.

Sahara Fixed Maturity Plans- 395 Days-Series 2 offers two options i.e. growth and dividend. There will no entry load charged for the scheme due to its close-ended structure. The scheme may charge an exit load of 2% if redemption is made before 6 months from the date of allotment, 1.50% if redemption is done from 6 months and before 9 months from date of allotment. There will be 1% an exit load if investment units are redeemed from 9 months of date of allotment to 1 day before maturity.

 

The scheme may invest 0-100% in money market instruments including repo. It will have an investment of 0-100% in government securities. Also, the scheme may have exposure of 0-100% in corporate bonds and other debt instruments. The maturity of any instrument in the portfolio will be less than 2 years. Investments in securitized debt including pass-through certificates (PTCs) may go up to 50% on defensive considerations.

 

Sahara MF launches Sahara Fixed Maturity Plans- 3 Months-Series 4

Sahara MF has launched a new fund called Sahara Fixed Maturity Plans- 3 Months-Series 4. It is a close-ended income scheme. The investment objective of the scheme is to generate income by investing into debt and money market securities, normally maturing in line with the time profile of the scheme.

Sahara Fixed Maturity Plans- 3 Months-Series 4 offers two options i.e. growth and dividend. There will no entry load charged for the scheme due to its close-ended structure. The scheme may charge an exit load of 2% if redemption is made before 1 month from the date of allotment, 1.50% if redemption is done from 1 month and before 2 months from date of allotment. There will be 1% an exit load if investment units are redeemed from 2 months of date of allotment to 1 day before maturity. The scheme may invest 0-100% in money market instruments including repo. It will have an investment of 0-100% in government securities. Also, the scheme may have exposure of 0-100% in corporate bonds and other debt instruments. The maturity of any instrument in the portfolio will be less than 6 months. Investments in securitized debt including pass-through certificates (PTCs) may go up to 50% on defensive considerations.

         

ING MF launches ING FMP- Series 42

ING Mutual Fund has unveiled a fund called ING FMP- Series 42 and it is a ING Fixed Maturity Fund Series 43 is a close-ended bond scheme offering an investment plan of 91 days maturity. The scheme will be investing in a portfolio of government securities, or highly rated corporate bonds maturing close to the maturity of the scheme so generate returns comparable with alternative fixed-income instruments of similar maturity. The scheme will invest in debt securities with maturity coinciding closely with the maturity of the scheme, so as to minimise the impact of price fluctuation of such securities and the value at maturity.

The scheme provides two plans i.e. retail and institutional plan with a sub-option of growth, dividend. Asset allocation: The scheme shall invest up to 100% in debt securities and money market instruments including call money and reverse repo. The debt securities may include securitised debt up to 100% of the net assets. The investments in derivatives instruments shall be to a maximum of 50% of the net assets of the scheme. The minimum investment amount is Rs 5,000 and in multiple of Re 1 thereafter. Under institutional plan, the minimum investment amount is Rs 1 crore in multiple of Re 1 thereafter

 

 

Tata MF launches Growing Economies Infrastructure Fund

Tata Mutual Fund has unveiled a fund called Tata Growing Economies Infrastructure Fund and it is an equity-diversified scheme. The investment objective of the scheme is to generate capital appreciation / income by investing predominantly in equities of companies in infrastructure and other related sectors in India and other growing economies of the world. The investment focus would be guided by the growth potential and other economic factors of the countries.

Tata Growing Economies Infrastructure Fund offers two options i.e. growth and dividend. The minimum investment for the scheme is Rs 10,000 and in multiple of Re 1 thereafter.

 

 

Principal Pnb MF revises load structure

Principal Pnb mutual fund has announced the revision in the exit load structure for Principal Government Securities Fund-Investment Plan. According to the revised load structure the fund will charge for investment below Rs 25 crore an exit load of 1% if the investment is redeemed within 365 days from the date of allotment. However, the scheme may not charge an exit load for investment of Rs 25 crore and above.

The scheme did not charge any exit load under existing load structure. The aforesaid changes will be effective from 18 February 2008. Principal Government Securities Fund-Investment Plan is an open ended dedicated gilt scheme. The investment objective of the scheme is to generate risk free returns through investment in sovereign securities and thus provide medium term capital gains and income distribution to its unit holders, while at all time emphasizing the importance of capital preservation.

 

 

JM Financial MF declares dividend under quarterly plan

The JM Financial mutual fund has announced the declaration of dividend under dividend option of JM Financial Fixed Maturity Fund-Series VI-Quarterly Plan 4. The record date for dividend will be 20 February 2008. The AMC plans to distribute realized appreciation in the NAV of the plan/option from 27 December 2007 till 20 February 2008 as dividend. The NAV of the scheme under dividend option of regular plan was recorded at Rs 10.1114 and dividend option of institutional plan at Rs 10.1168 as on 14 February 2008. JM Financial Fixed Maturity Fund-Series VI-Quarterly Plan 4 is a close-ended income scheme with an investment objective of generating regular income through investment in fixed income instruments normally maturing in line with the time profile of the respective plan.

 

 

HDFC MF rolls out 15 Months plan under HDFC FMP -Series VII

HDFC Mutual Fund has rolled out a fund called HDFC Fixed Maturity Plan 15 Months February 2008 and it is a close end income fund. The investment objective of the fund is to generate regular income through investments in debt, money market instruments, and government securities. Options: HDFC Fixed Maturity Plan 15 Months February 2008 offers wholesale plan and retail plan with growth and dividend option.

 

HDFC MF launches 90 Days plan under HDFC FMP -Series VII

HDFC Mutual Fund has unleashed a scheme called HDFC Fixed Maturity Plan 90 Days February 2008 and it is a close end income fund. The investment objective of the fund is to generate regular income through investments in debt, money market instruments, and government securities. HDFC Fixed Maturity Plan 90 Days February 2008 offers wholesale plan and retail plan with growth and dividend option.

 

 

HSBC MF plans to unveil HSBC Infrastructure and Real Estate Fund

HSBC MF is planning to unveil a fund called HSBC Infrastructure and Real Estate Fund. HSBC Infrastructure and Real Estate Fund is an open-ended equity scheme. The investment objective of the scheme is to provide long term capital appreciation predominantly through actively managed investment in equity/equity related instruments of companies operating in the Infrastructure and Real Estate sectors. The scheme may also invest surplus funds in debt and money market instruments. The scheme offers growth and dividend options. The dividend option offers dividend payout and dividend reinvestment facility. The scheme will invest up to 65-100% of its portfolio in equity and equity related instruments of infrastructure and real estate companies. The scheme may invest 0-35% in other equity and equity related instruments and 0-35% investment in debt and money market instruments. Investment in securitised debt will not exceed 35% of the corpus. Investment in foreign securities should not exceed 50% of the assets of the scheme.

 

 

HSBC MF files another offer document

HSBC Mutual Fund is planning to unveil a scheme called HSBC Agri and Natural Resources Fund. HSBC Agri and Natural Resources Fund is an open-ended equity scheme. The investment objective of the scheme is to provide long term capital appreciation predominantly through actively managed investment in equity/equity related instruments of companies operating in the agriculture and natural resources sectors. The scheme may also invest surplus funds in debt and money market instruments.

The scheme offers growth and dividend options. The dividend option offers dividend payout and dividend reinvestment facility. The scheme will invest up to 65-100% of its portfolio in equity and equity related instruments of infrastructure and real estate companies. The scheme may invest 0-35% in other equity and equity related instruments and 0-35% investment in debt and money market instruments. Investment in securitised debt will not exceed 35% of the corpus. Investment in foreign securities should not exceed 50% of the assets of the scheme.

 

HSBC MF comes out with dividend

HSBC Mutual Fund has announced 21 February 2008 as the record date for declaration of dividend under dividend option of HDFC Interval Fund-Plan I. The fund house has decided to distribute 100% of surplus available under its both retail and wholesale plans as on record date. The NAV for the scheme was Rs. 10.1165 as on 14 February 2008. HDFC Interval Fund-Plan I is a debt oriented interval scheme, seeks to generate returns by investing in a portfolio of fixed income instruments normally maturing in line with the time profile of the respective plan.

 

Kotak MF launches new FMP

Kotak Mutual Fund has rolled out a scheme called Kotak Fixed Maturity Plan 14 month Series 3 and it is a close-ended bond scheme with tenure of fourteen months. The scheme offers retail and institutional plan. The scheme offers investors growth option and dividend option under both the plans. The dividend option offers dividend payout and dividend re-investment facilities. The objective of the scheme would be to generate returns through investments in debt and money market instruments with a view to significantly reduce the interest rate risk. The minimum investment amount under regular plan is Rs 5,000 and in multiples of Re 1 thereafter. The minimum investment amount under institutional scheme is Rs 50 lakh and in multiples of Re 1 thereafter.

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News Round up- Economy (18th Feb 2008)

News Round up- Economy (18^th Feb 2008)

Insurance sector seeks 49% FDI

MUMBAI: The insurance sector has demanded a hike in foreign direct investment (FDI) limit from the present 26 per cent to 49 per cent and exemption of service tax for health insurances.

"For the growth of the insurance sector, the FDI cap of 26 per cent should be increased to 49 per cent. This will help to further deepen the Indian insurance market," Unison Insurance Broking Services' Managing Director, B K Sinha, said on the sidelines of an insurance seminar on Sunday.(Full Story)

 

 

HSBC hints at more investment in India

MUMBAI: Hoping to benefit hugely from the India-growth story, global banking major HSBC, hinted at more investments in the country once the regulatory environment permitted it.

The bank is understood to be open to adopting the inorganic route to grow in the Indian market as and when the regulatory environment become conducive for it.

"We are waiting for the right market opportunities in India and will increase our investment here, as and when the regulator allows us," HSBC's Head of Personal Financial Services, Asia-Pacific, Nicholas G Winsor, said. (Full Story)

 

 

New UK rules for money transfer to India

LONDON: The British government has introduced new rules for money transfer companies to ensure that the money, which is transferred from Britain overseas including India, are delivered safely and to the right person.

Annually, about 2.3 billion pounds are transferred from Britain overseas, most of it to 50 developing countries.

A large chunk of it, about 300 million pounds, is transferred to India every year, followed by Pakistan (200 million pounds).

However, individuals who transfer the money to India and other places face worries about the amount reaching the destination, and reaching the right person. (Full Story)

 

 

SEBI warns investors against 'Art Funds'

MUMBAI: The Securities and Exchange Board of India has sought to caution investors with regard to investing in Art Funds, funds/schemes launched by companies formed for the purpose.

The market regulator Wednesday said at present, no entity was registered with it under the SEBI (Collective Investment Schemes) Regulations.

At the same time, SEBI has threatened actions, civil and criminal, against such funds / companies and warned against launching of "Art Funds" or schemes without registration. (Full Story)

 

 

Tax collection needs to be balanced: Supreme Court

NEW DELHI: The Supreme Court has rejected the Kerala government's plea, seeking disallowance of tax exemption benefits to an assesee saying a balance should be struck between revenue collection and business-friendly approach.

"Tax administration is a complex subject. It consists of several aspects. The government needs to strike a balance in the imposition of tax between collection of revenue on one hand and business-friendly approach on the other," a bench comprising Justices SH Kapadia and BS Reddy said. (Full Story

 

 

Small investors expect populist budget

The UPA's Finance Minster is expected to deliver a populist budget and so the demands are running high. The small investors are hopeful of a tax cut. At present, income up to Rs 1,10,000 for men and Rs 1,45,000 for women attracts no tax. Experts feel that this threshold can be increased by another Rs 40,000. Since incomes have also risen significantly, the highest tax rate of 30 per cent should be applicable to salaries above Rs five lakh against the current Rs 2,50,00. This could translate into a cool saving of Rs 40,000.

Another way to save on tax is to invest up to Rs one lakh into tax saving instruments. Investors want their limit to be hiked but they are also demanding that the government should extend tax saving sops to a wide variety of options. Investors are also demanding that interest on fixed deposit savings should become tax free and MFs across the board should get a tax saving waiver instead of restricting this option only to ELSS schemes.

"Even if you increase tax slab, it will definitely help. Secondly, mutual fund as a method of saving is becoming more popular. It is an opportunity to create wealth and not just an avenue for savings or short-term speculation. Having burnt their fingers in the recent market correction, small investors would be looking for a silver lining in this year's budget. A cut in income tax rates is what everyone is expecting but at the same time, more money in the hands of investors, whether invested or spent, will also help spur growth

 

Rupee appreciates 15 paise

Mumbai: Overcoming the weakening trend of the past few days, the Indian rupee on Thursday appreciated by 15 paise against the U.S. currency at 39.61/62 in sync with the surge in domestic as well as Asian stock markets amid increased availability of dollar. The rupee moved between 39.60 and 39.73 at the interbank foreign exchange market. It had closed at 39.76/77 on Feb 13, its lowest level since November 28 last year.

The rupee premiums on forward dollar also recovered sharply on fresh paying pressure from banks and corporates. Foreign exchange dealers said anticipation of fresh capital inflows, the key driver for the Indian unit, in view of the rise in equity markets and expectations of foreign institutional investors turning active once again boosted rupee sentiment. A record FII inflows had pushed the rupee up by about 12 per cent against the dollar last year.

 

Other Stories

FM may cut duty to spur growth

Industry bodies like the Consumer Electronics & Appliances Manufacturers Association have sought a cut in excise duty from 16 per cent to 8 per cent. The general consensus, however, is that a moderate duty cut to 12 per cent could be in the offing.

 

Petro price hike just a drop in ocean for PSUs

IOC chairman said the increase in prices of diesel and petrol will substantially reduce the bonds in the next financial year.

 

India, China are not immune to crisis: IMF

The IMF MD also admits that the Fund had previously underestimated implications of the crisis in the US.

 

IT shrugs off recession fears

It is now clear that the IT and BPO sector will be hit by the US recession only in the future

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FM may approve $ 5 billion fund for Indian M&A

The government is considering a sovereign investment fund with an initial corpus of $5 billion to acquire companies abroad. The investment fund may also be used to bolster the country's energy security by acquiring coal mines and oil and gas blocks abroad.

Prime minister Manmohan Singh has issued a directive to the finance ministry in this regard, and an announcement is likely in the Budget, an official said.

According to officials, one of the options available to the government is to create a special purpose vehicle (SPV), which will borrow funds from RBI in the form of long-term securities in foreign currency and lend the same to Indian companies at lower rates. Thus, RBI and the government will be able to earn more on forex reserves, which currently fetch average returns of 3.5-4%.

 

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News- Sensex may touch the level of 29,000 by June 2009

Like Mumbaikars caught unawares by the recent spell of cold wave, investors have been struggling to adapt to the recurring bouts of volatility on the bourses over the last one month. But the weathermen of Dalal Street are expecting sunny skies by the end of this calendar year. Five of the six participants at the ET Round Table see the bellwether BSE Sensex between 20-22,000 then.

The panelists included Narayan Ramachandran, MD & Country Head, Morgan Stanley; Pankaj Vaish, MD & Head equities and fixed income, Lehman Brothers; Ved Prakash Chaturvedi, MD & CEO, Tata Asset Management; Gaurang Shah, MD, Kotak Life; Rashesh Shah, CEO, Edelweiss Capital; and Motilal Oswal, Chairman, Motilal Oswal Securities. The session was moderated by Ramesh Damani, director, Ramesh S Damani Finance.

Only one participant, Ved Prakash Chaturvedi felt that the market was likely to be around 18,000 levels on December 31, 2008. "But that does not mean that mutual fund investors will not make money," he added.

Mr Ramachandran expects a modest performance by the Sensex in the current calendar, but expects the benchmark to touch 29,000 by June next year. Slowing corporate earnings is one factor that most market watchers feel could hold back the market. However, the ET panelists are not too worried about it.

According to Mr Ramachandran and Mr Vaish, interest rates are showing signs of slackening and that could provide a support to corporate earnings over the next couple of years. "These (recent outflow of FII money) are not big things...they are just minor....India has attracted a lot of money and most of it came because of the fact that India is an attractive destination for money," said Mr Ramachandran. "The real thing that will decide is where fundamentals are going. I feel that they (fundamentals) are solid," he added.

Mr Shah felt that issue was not about whether earnings will grow 18% or 12%, but about the rate at which the Indian GDP would grow. "If you expect corporate earnings growth of 11-12%, it means we are looking at a GDP growth of 4.5 to 5 to 6%. But if you expect GDP growth rate to be around 8%, give or take 200 basis points, then a 17-18% corporate earnings growth is not difficult. And I haven't seen anybody—Indian or global—question India's 8% GDP growth rate," Mr Shah said.

While foreign funds have pulling out over the last few months, domestic liquidity has been a strong pillar of support and this trend is expected to continue, feels Mr Chaturvedi. "The kind of money we have seen that has flown in from the domestic investors in the last one year is certainly heartening," said Mr Chaturvedi. "My guess is that if you combine insurance and mutual funds and other (domestic) sources of inflows into the market, close to $2 billion of fresh money is coming into the market every month," he added.

Mr Gaurang Shah sees more investors tapping the stock market through Unit Linked Insurance Plans (ULIPs), mainly because of the handsome returns these products have delivered in the last four years of the Bull Run.

He excepts inflows of roughly $5 billion through various insurance schemes during the current quarter, a significant portion of which will be accounted for by ULIPs.

"I think relative disadvantage of insurance as a instrument vis-à-vis other fixed interest products has come down, which is also because real interest rates have reduced across the world over the last 10 years. So I see money continuing to come in," he said.

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SIP route works well in volatile market conditions

The volatility in the markets has once again underlined the relevance of SIP as a safe route for investors.
If anyone had doubts about the relevance of SIPs (systematic investment planning), it is sure to have disappeared by now.

The volatility in the market has touched a new high in the last couple of weeks, and hence, SIP is one of the few options which can insulate an investor from huge negative returns in the coming days.

For those who are still wondering why SIP is a better option in the current market place, here is a brief outline.

Does it ensure safety?

The question is how SIPs can ensure safety in a market which is swinging across a wide range. SIPs allow you to buy into the market at different price points unlike lump sum investments where the skill of timing becomes more crucial to get maximum returns.

 Since no market participant has perfected the art of timing the market, it would be safe to assume that long-term investing is a better way of building wealth.

What has also compounded the problem is the uncertainty surrounding the market. For instance, when markets were on a roll, everyone was convinced that India had little to worry about - its growth prospects or the effects of the US mortgage crisis.

It seemed as if nothing could go wrong with the sentiments which had touched euphoric levels. In less than six months, the sentiments had taken a complete beating and even at a time when the Sensex is adding 800 points to its kitty, the mood is not exactly euphoric.

If uncertainty has increased the volatility, it has also thrown up investment options at regular intervals for investors. Unfortunately, the task of investing in the market at every dip is not easy as markets have tended to swing in a wide range even during the day.

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Anil Ambani Group demands SEBI probe in IPO blues

Blaming a vicious campaign by rival corporate interests for pulling down Reliance Power and other group firms stocks, Anil Ambani Group on Sunday demanded a probe by market regulator SEBI into market abuse that hit millions of investors.

The decline in the Reliance Power stock prices has been compounded by a vicious and orchestrated campaign of market manipulation and market abuse, the company said. Investors in the company lost over Rs 1,700 crore on February 11, day the scrip listed on stock exchanges.

While the company did not name anybody, who it felt had attempted to undermine the ADA Group's "fair name and reputation and caused losses to millions of genuine investors", the statement said that Reliance Power has formally written to SEBI seeking an investigation into the same.

Even before launching the IPO, the group Chairman Anil Ambani had said that it had written a complaint to SEBI but had not received any response on the same.

In its earlier complaint, Reliance Energy, a promoter company of Reliance Power, had named over a dozen top executives and associates of Mukesh Ambani headed Reliance Industries for allegedly sabotaging the IPO.

At that time, a spokesperson of RIL had said that the company had nothing to do with Reliance Power and countered the attack saying Anil Ambani group was raising this to divert attention from the corporate governance issues.

Reliance Power IPO was given a clearance by SEBI only in December, after a prolonged delay, which sources say was due to investigation into various complaints filed with the government and other authorities against the issue.

In its statement today, Reliance Power said that the company has the world's largest shareholder family of nearly 500 overseas and domestic institutional investors and over four million retail investors.

In the run up to its IPO, the company had faced numerous litigations, filed in different courts by some investor group. Even two days before the launch of the IPO, a petition had been filed in the Gujarat High Court seeking a stay. But the company had moved the Supreme Court for relief and launched the issue on January 15.

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Reliance Power plans bonus share issue for shareholders

Reliance Power Ltd plans to issue bonus shares to all equity holders other than the founders, hoping to cheer retail investors after the firm's shares tumbled following a record $3 billion IPO.

Its board is scheduled to meet on February 24 to consider issuing bonus shares and/or other measures which it said would effectively reduce the cost of the company's shares.

"This will include a proposal for issuing free bonus shares to all categories of shareholders excluding the promoter group, thereby protecting investors from even short-term losses on their shareholdings," it said. Reliance Power's shares, which listed on the stock exchange on February 11, had fallen by a quarter but recovered to close 15 percent below the IPO price of 450 rupees a share on Friday, helped by three-day market rally which saw the benchmark index climb 9 percent.

The slump in Reliance Power, a unit of the Anil Dhirubhai Ambani group, infuriated investors, many of whom complained they were lured to invest in the company because of promises from the firm, which has no operating power plants and is unlikely to report strong profits for five years.

Reliance's supporters say the Ambani family has a strong track record of executing projects on schedule and delivering strong returns to investors, attracting millions of investors to bid for its shares offered in India's biggest IPO ever.

The company said its shares were hit by weak market sentiment and blamed rivals, who were not identified, for hammering shares of companies in the Anil Dhirubhai Ambani Group. It also reminded investors that there were risks attached to equity investments.

"Equity shares, by their very nature, are risk-bearing instruments and there is no obligation on behalf of any issuer to insure investors against possible losses," it said. However, the company's board would consider a bonus issue and other steps as the group had a "fundamental and over-riding philosophy of creating value for genuine long term investors".

The fall in Reliance Power's shares followed market turbulence that knocked out a few IPOs, including the $1.6 billion issue from Emaar MGF Land, the Indian unit of Dubai's Emaar Properties. Reliance Communications, another Anil Ambani firm, is planning an IPO for its telecom towers unit, Reliance Infratel Ltd, which media reports and bankers say aims to raise $1-1.5 billion.

Founded by Dhirubhai Ambani, the Reliance companies were divided between the late Ambani's sons in 2005. Anil has interests in telecoms, financials, media and power while elder brother Mukesh controls India's top listed firm, oil and petrochemicals giant Reliance Industries Ltd.

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