Reliance Power IPO the biggest one to hit the Indian markets attracted some great interests among the investors and FIIs alike.There were many other records which were broken by this IPO from ADAG group.But finally it went down into the pages of history as one of those high profile IPOs which garnered very less premium than expected.

At one point of time the gray market premium of this script was about Rs 850 or so.On Feb 11th it listed on the markets at Rs 430 getting a premium of just Rs 80 over its issue price of Rs 450.Well the market sentiments with a huge fall last month led to the bad opening but there are a few other reasons which hammered the stock within minutes of opening.So time to get into the details.

After a lot of hot discussions the Reliance power IPO got listed at Rs 530 in sensex and Rs 547.80 in Nifty at 9.55 AM on Feb 11th 2008.But within just 4 minutes the stock went down by about 28% in sensex and was hovering around Rs 395 which eroded Rs 30,000 crore from the investors wealth.The investors were shocked beyond means.What was happening behind the scenes then?

SEBI data shows that about 23.77 million shares which was 10.4% of the entire issue was sold within the four minutes of listing.The shares were sold in between Rs 443 and Rs 392 which was way lower than the issue price of Rs 450.The selling groups were none other than 3 FIIs from Mauritius and a domestic bank from India.The 3 FIIs sold out their entire allotment of 2.6 million shares.Five other FIIs also followed the same path and sold 2.47 million,2.46 million,2.45 million,1.99 million,1.68 million and the domestic bank sold 1.69 million.

This trigger led to many small time retail investors to sell their shares in panic and so the script ended the day in negative.The Reliance power board are meeting on Sunday to decide on the issue of bonus shares to the investors to make up losses of the investors to certain extent.I shall bring more on this in the coming days.So keep visiting the place for more updates on this issue and bonus shares allotment.

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