Power Grid up 100%

The much-awaited debut of Power Grid Corporation (PGCIL) coincided with the high volatility on the bourses, but the stock ended the day at a little over Rs 100, a premium of 93.46% to its issue price of Rs 52. The stock surged more than 100% during intra-day trades, and managed to hold on to most of its gains through the day. On NSE, the stock touched a high of Rs 109.50, after opening at Rs 89.80.

More than 48 crore shares changed hands on NSE. On BSE, the stock opened at Rs 85 and did not fall below that level. Later in the day, it touched a high of Rs 109.40, before closing at Rs 100.65. Nearly 10 crore shares of PGCIL changed hands on BSE, with a little over 35% resulting in delivery.

However, most of the power stocks ended the day on a weak note as the overall market fell in the last one hour of the trading session.

NTPC lost maximum ground among the heavyweights, shedding 5.28% to close at Rs 214.45. Similarly, Tata Power (down 4.92% at Rs 944.10) and Reliance Energy (down 2.08% at Rs 1,447.16) also ended the day lower after an impressive run in the recent past. CESC also ended the day in the red at Rs 566. However, Torrent Power managed to buck the trend, gaining 5.21% to close at Rs 128.15.

Nevertheless, the frenzy in the power sector is showing no signs of abating. The stock of the soon-to-be-listed Reliance Power is already said to be commanding a premium of Rs 32-35 in the grey market. The company has not yet announced the price band, but analysts expect the pricing to be in the Rs 60-80 band. This is based on estimates that the company would be looking to raise anywhere between $2 billion and $3 billion. At Rs 70, the company is valued at Rs 91,000 crore (around $22.75 billion).

“The grey market premium for Reliance Power would keep changing in line with the overall bearish or bullish sentiment in the market,” says an Ahmedabad-based broker.

According to brokers operating in the grey market, dummy retail applicants for the IPO are being paid as much as Rs 4,000 per Rs 1-lakh application.

These are retail investors who have subscribed to the IPO in their own names, but have entered into agreements with grey market operators to grab the shares immediately on listing. Reliance Power has proposed an IPO of 130-crore equity shares that constitute 10.1% of the post-issue paid-up equity capital of the company.

Currently, the promoter company Reliance-Anil Dhirubhai Ambani Group (R-ADAG) and Reliance Energy (REL) hold 50% stake each in Reliance Power. In REL, the promoters hold a 34.58% stake.