Click to play videoMumbai: Reliance Power has now come out with its much-awaited bonus share issue after its poor listing on the Bombay Stock Exchange.
On February 11, within minutes of the Reliance Power listing, the share was beaten below the issue price of Rs 450 and more than 42 lakh retail investors saw their hard earned money going down the drain.
But in a masterstroke aimed at keeping investors happy Reliance Anil Dhirubhai Ambani Group (ADAG) Chairman Anil Ambani has now sought to give it back to them.
"The board has approved an issuance of free bonus shares in the ratio of three is to five. That means for every five shares you hold, you will receive three shares each," Anil Ambani announced
For the retail investors it means a reduction in the cost of acquisition by 40 per cent from the IPO listing price. Now, each Reliance Power share will cost 269 rupees per share.
And not just the retail investors, Anil Ambani has also protected the stakeholders interest, by contributing, personal shareholding of 2.6 per cent to Reliance Energy Limited
While issuing free bonus shares, Ambani also raised questions on the role of seven Mauritius based FII's who had hammered the stock, post listing.
"But the fact that seven Mauritius-based FIIs had sold which defies all logic that in a falling market you keep selling. I can understand that in a rising market you will sell, but if in a falling market you keep selling them, (then) there is got to be something more than that meets the eye. But we will see it," Anil Ambani said.
In many ways Anil Ambani had very little options. A number of IPO's from other group companies are planned in the coming months and if rising investor distress would not have been contained, the upcoming IPO's might have faced the brunt.
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