Debacle of Reliance Power IPO - A Case Study

Abstract

During January 2008, the maiden public issue of Reliance Power Limited, India, was oversubscribed 73 times and garnered an astronomical $190 billion. It created many world records. It was the largest subscription of any IPO (initial public offering) anywhere in the history of global capital markets with a record five million applicants. It became 10 top listed companies in India with the largest number of shareholders in any listed company in the world. The high growth Reliance Group companies are known for producing stock-market gains from the moment they are listed. No issue since its inception in the year 1965 had failed to date in the stock market. So the highly oversubscribed issue was keenly awaited to open on February 11, 2008 in the twin stock exchanges National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) of Mumbai, India.