Reliance Power IPO

[rookie_gau]

Just Read this Moneycontrol Article today.

I find it very frightening. If we are unable to sell at around 10, then the stock price may go well down. B'cos all the categories, HNI, QIBs will try to book profits due to loan interest pay back. Also, Many Retail investors will try to book profit (Atleast partial). So all those crores of shares (around 3-5) will be available for selling. I do not think that there will be many buyers 2moro.

This is a real worrying thought.

[maverick]

Originally Posted by analyst

Anil Ambani will ensure that the listing price is more than Rs. 430 and everybody makes money or nobody will subscribe to his 6000 crores Infratel project.

How will Anil Ambani make sure about the price in the market? Can he interfere with the market action, or are we expecting him to buy the shares himself from the market?

[apprentice]

I still can't allocate Rel Power shares on icicidirect , when i try , keep getting that Inactive error .......means i can't sell them today , getting worried now.........anybody else facing the same problem ???

SOS !!

[InvestorB]

Originally Posted by apprentice

I still can't allocate Rel Power shares on icicidirect , when i try , keep getting that Inactive error .......means i can't sell them today , getting worried now.........anybody else facing the same problem ???

SOS !!

Hi
In one of the earlier posts on this thread, someone[dont remember who], has told that ICICIdirect would be updating your DP balance after market opens. Though you will not be able to sell at 9:55, you should see the shares within a few minutes..and then do whatever you want..
hope that clears...I dont use ICICI myself so I cant give you more info!!

[rookie_gau]

Originally Posted by maverick

How will Anil Ambani make sure about the price in the market? Can he interfere with the market action, or are we expecting him to buy the shares himself from the market?

Yes, He can. You forget that he has Reliance Capital at his disposal. I bet all the Reliance Fund houses will find the stock attractive today!!

[apprentice]

Originally Posted by InverstorB

Hi
In one of the earlier posts on this thread, someone[dont remember who], has told that ICICIdirect would be updating your DP balance after market opens. Though you will not be able to sell at 9:55, you should see the shares within a few minutes..and then do whatever you want..
hope that clears...I dont use ICICI myself so I cant give you more info!!

Thanks mate ....that clears things up a bit , will give it a go , i hope all this hassle is worth it

[Alchemist]

Originally Posted by apprentice

I still can't allocate Rel Power shares on icicidirect , when i try , keep getting that Inactive error .......means i can't sell them today , getting worried now.........anybody else facing the same problem ???

SOS !!

Allocation is possible now.

However "Sell Orders" still not accepted.

ICICIDirect is already very slow. I wonder what will happen at 10 AM...

[analyst]

It is 9.35 am now.

Just downloaded the Master Scrips at India Infoline.

Reliance Power - The BSE Code No is : 532939 and the NSE Code No is 15259.

Good Luck to all you investors.

[rameshbende]

When do the markets open at 9:55 or 10:00 ??

[arghyas]

Listing price at BSE is 490.80
Alchemist, can we hope to see the price going uphill for some time, or should we sell now??
Advice ASAP.

[Prudent_Investor]

whats the best price to bid now ? big disappointment .

[InvestorB]

Originally Posted by Prudent_Investor

wats the best price to bid now ? big dissapointment

RPOWER goes below 400/-
do you see any support???
Im broken!!

[ranji]

Anyone able to allocate the share in icici direct.
I am getting a "bea.jolt.ServiceException: TPETIME - timeout occured" error.

[teenshark]

380 and back to 420 .. too many sellers ... very few buyers

[Prudent_Investor]

Originally Posted by ranji

Anyone able to allocate the share in icici direct.
I am getting a "bea.jolt.ServiceException: TPETIME - timeout occured" error.

yeah, I allocated at 9:30 , but was the point ? these are no price to sell

[apprentice]

Originally Posted by ranji

Anyone able to allocate the share in icici direct.
I am getting a "bea.jolt.ServiceException: TPETIME - timeout occured" error.

i got the same message now, but managed to allocate after a couple of attempts....icici server heavily loaded

keep trying , should work soon ...CMP is 431.70

[spacenoxx]

So much for our listing gains. Like I said before I would even sell at (worst possible scenario) 450 but now looks like I may have to be happy to be able to sell it at 450

[srmk]

http://www.bseindia.com/price_finder...ripname=RPOWER

[Alchemist]

Sold all shares.

16 @ 443.0
17 @ 447.8
17 @ 448.6

The stock may go to 460-470 once HNI selling stops.

I didn't find the risk reward favorable and sold out.

[sdinvest]

I think I will hold on the stock and even buy some if it comes in the range of 350-370. That said I'll sell if it touches 550.

[s.balamurugan]

The stock's intra-day high was Rs 599.90 (From Moneycontrol)

[sdinvest]

I think the stock will come back to 530-550 levels in the next 2/3 days.

[Alchemist]

Originally Posted by s.balamurugan

The stock's intra-day high was Rs 599.90 (From Moneycontrol)

Stray trade at opening. Don't bother about opening rates.

================================================== ================

The selling in Reliance Power is definitely coming from HNI and QIB segments too.

The order sizes are in 1000s of shares.

Retail investors have got only 16-17 shares and these orders have to be from QIB's or HNI's.

[VRajesh]

I sold @445.5.

Alchemist,
can v buy the stock if it reaches 350 today?

[Alchemist]

Originally Posted by VRajesh

I sold @445.5.

Alchemist,
can v buy the stock if it reaches 350 today?

I would buy if I get 320-330. However, this will be a trading buy for a target of 380-390.

I am not interested in investing in Reliance Power.

[ranji]

Originally Posted by Alchemist

Sold all shares.

16 @ 443.0
17 @ 447.8
17 @ 448.6

The stock may go to 460-470 once HNI selling stops.

I didn't find the risk reward favorable and sold out.

finally could allocate after 55 minutes .. sold all @ 445 ..

[westside]

How come my RPOWER shares were allocated in NSE? How does the IPO allocated exchange get decided? Since morning i was trying to put a sell of my shares in BSE!!! :-)
Is there a way to buy shares in one exchange and sell in another? (I know its might be a stupid question, but still asked :-).

Thanks

[Alchemist]

Reliance Power Trading Statistics till 11:30 AM:

NSE cash turnover: Rs 3091 crore.
NSE futures turnover: Rs Rs 570 crore.

There is a large difference between cash and futures value.

This is an indication that there is not much shorting taking placed and most of the selling is delivery based selling.

================================

Compare this with figures of REL:

NSE cash turnover: Rs 334 crore.
NSE futures turnover: Rs Rs 687 crore.

or Reliance Industries:

NSE cash turnover: Rs 259 crore.
NSE futures turnover: Rs Rs 410 crore.

[spacenoxx]

Sold them @ 444. I really would have been happy to sell them @ 450. In any case there are far more interesting stocks in the market right now. What with stocks like ICICI trading @ 1028

[Alchemist]

In case of a capitulation in Reliance Power, it can be bought for a short-term bounce back.

Intraday traders are continuously buying this stock for a bounce back.

On the other side, a large part of the selling is being done by stock holders.

By the time the day ends, if the long day traders are not able to close their positions, the stock may see a major sell-off in last few minutes of trade.

I would buy the stock around 320-330 for a bounce back to 360-370 in a day or two.

I am not saying 320-330 will come, but if it comes, it will be a good point to enter for only 10% upmove.

This applies only for today.

If 320-330 comes after a few days, I will not buy.

[Alchemist]

Reliance Power's Trading Statistics On Listing Day:

Number of shares traded on NSE: 13,43,92544 (~13.44 crore).
Number of shares delivered on NSE: 4,71,61182 (~4.72 crore).
Number of shares traded on BSE: 6,38,82971 (~6.39 crore).
Number of shares delivered on BSE: 1,75,85373 (~1.76 crore)

NSE delivered: NSE traded: 35.09%
BSE delivered: BSE traded: 27.53%

Total traded shares: 19,82,75515 (~19.83 crore).
Total delivered shares: 6,47,46555 (~6.47 crore).

Total shares offered in IPO: 22,80,00000 (~22.8 crore).

Ratio of shares traded to total shares offered in IPO: 0.870.
Ratio of shares delivered to total shares offered in IPO: 0.284

Conclusion: 28.4% of the shares alloted in the IPO were sold on the first day.

==========================================

This figure of 28.4% is surprising for me.

The figure was much higher in case of Mundra Port IPO and Future Capital Holdings IPO. (33.7% and 45.3% respectively).

This means there is still a large number of investors who are sitting on losses and would like to sell if the price moves higher in coming days.

[shail116]

Hi Alchemist,

What's your say abt RPL's stocks price in near future? Do you think it can still go further below 355 in near future? If yes, how low? If not, what could be the price of this share going forward...let's say 2-6 months down the line looking at the technicals, its fundamentals, market behaviour etc?

Thanks

[Alchemist]

Originally Posted by shail116

Hi Alchemist,

What's your say abt RPL's stocks price in near future? Do you think it can still go further below 355 in near future? If yes, how low? If not, what could be the price of this share going forward...let's say 2-6 months down the line looking at the technicals, its fundamentals, market behavior etc?

Thanks

The stock listed just today and so there is nothing to comment about its technicals.

However, I can say one thing - it will take some time before it can cross 450...weeks...months...years...not sure about it.

In my earlier post on Reliance Power's valuations, I had estimated a profit of Rs 15000 crore in FY 2017.

This would be equal to an eps of Rs 66 for FY 2017.

CNBC's analysts have a figure of Rs 60 for FY 2015.

Lets take the mid-value. Rs 63 eps for FY 2016.

Worldwide, power companies (utilities) trade at not more than 12-15 times forward earnings.

Lets give a forward PE of 15 to Reliance Power.

This means the stock will trade at Rs 945 on 1st April 2015 (beginning of FY 2016).

How much are you willing to pay for Rs 945 in April 2015.........7 years from now?

That is the right price for Reliance Power.

Confused?

Lets think of it as this way:

If you want 10% annualized returns in 7 years, you should be paying Rs 484 for Reliance Power today.

Similarly,

10% - Rs 484.
15% - Rs 355.
20% - Rs 264.
25% - Rs 198.
30% - Rs 151.
35% - Rs 116.
40% - Rs 90.
45% - Rs 70.
50% - Rs 55.

I think 25%-30% would be a reasonable expectation.........

========================================

There are lot of "if's and but's" with these earnings estimates.

A lot of positive and negative things can happen with Reliance Power in these seven years:

-it may get new projects.
-power tariffs may rise sharply.
-its projects may not get completed as scheduled.
-it may have trouble getting coal/gas for its projects; or the costs of these raw materials become so high, that its margins may get squeezed.
-it may not be able to generate enough cash to meet its debt obligations and may have to sell off some of its projects.
-it may dilute equity to meets fund requirements.

etc etc etc.

It is very very difficult to predict how well/poorly a company will be functioning seven years from now.

(It is much easier to predict about an economy or a sector as a whole, but not so for individual companies.)

As there is low visibility and lot of uncertainty associated with this company, I will not buy this stock at any price which gives me less than 25%-30% returns over the next 7 years.

(Even these eps estimates may be nowhere near the actual figures 7 years from now. These figures have been derived from raw calculations).

Thus, for me:

10% - Rs 484. (Unattractive price).
15% - Rs 355. (Unattractive price).
20% - Rs 264. (Unattractive price).
25% - Rs 198. (Slightly attractive price).
30% - Rs 151. (Slightly attractive price).
35% - Rs 116. (Very attractive price).
40% - Rs 90. (Very attractive price).
45% - Rs 70. (Very attractive price).
50% - Rs 55. (Very attractive price).

[shail116]

Thanks Alchemist! Excellent analysis. Your last 3 posts have been very informative. You predicted that this stock might trade at around 320-330 during last minutes of today's business hours and reading that I was watching this stock closely in last half an hour of trading. It indeed went down drastically and touched 355 from around 400.
Now this is with ref to your last post. The prices you have quoted in your post may be right if people go by the fundamentals while I don't think that to be the case with our traders and investors. In the bullish market almost all stocks shoot up even pebbles irrespective of their actual valuations. RNRL is one of the best examples. I fully agree with you about what should be the ideal price for this stock, I believe that this scrip will shoot up like anything when the market stablizes or gets bullish.

[ranji]

Originally Posted by ranji

lottery allotment, grossly overvalued and you will feel stupid if you dont apply ... where are we heading navigator ...

we were heading down

[bk99]

All you people talk about reliance power listing price and what not.
Just ask yourself two questions
1.why didnt cnbc tv18 and udayan mukerjee in particular talk about valuations of rel power when the ipo was open. The only thing they discussed was market of rel power and ntpc.

2. Why didnt they compare p/e and other valuation parameters when the issue was open and why are they criticizing everybody now.hope they arent covering up themselves.

3. So much was said about grey market when the ipo was open. Once the ipo is closed you start exposing the grey market.

Dear people kindly ask yourselves these questions and if possible ask the channel also. I have tried asking them by posting messages but the message is never published nor replied.

[Alchemist]

Originally Posted by bk99

1.why didnt cnbc tv18 and udayan mukerjee in particular talk about valuations of rel power when the ipo was open.

Majority of the analysts on CNBC had stated that there was not much value in the Reliance Power IPO.

They had clearly stated that it was to be played for listing gains.

Udayan had questioned the valuations on multiple occasions.

However, the investors were too busy to listen to any voices of logic.

The facts are simple:

All of us were playing for listing gains. The sentiment in the market changed and thus there were no listing gains.

=======================================

Some comments by Udayan:

On 4th January 2008:

But the risks have risen considerably after the last few days and the rally that we have seen in most power stocks. While there might be little bit more upside there is a touch of madness which is visible and a lot of trading sentiment is getting into these prices.

I think people might lose money in this sector. It may not be next week, it may not be next one month also but at some point in 2008 one will get a serious cut in this sector.A few investors might lose money out here after all this Reliance Power excitement has died down. So keep that at the back of mind while the party is one and one does not want to miss out altogether. At some point it maybe prudent to become a bit more disciplined in the sector because there is a touch of madness there for sure.

Source.

These are some more comments by Udayan. The article is no longer available at moneycontrol.com, but I used Google's cache to find it.

On 15th January 2008:

It’s a bit pointless talking about valuations of Reliance Power because for a majority of people out there, Reliance Power has become a flipping game. So I don’t think, it may make a lot of sense for us to go on talking about it till the cows come home but people do not care about P/E multiples, execution risk, 7-year bands and 4-years bands.

and the most important statement that Udayan made on 15th January:

But just one word of caution on the table, it’s been taken for granted that the stock will list at a certain price and hold and too many players are waiting to rush to the exit door on the day one. So I hope things are okay, I suspect they will but I hope nothing goes wrong between now to the listing date because the market also seems to be fluid kind of situation globally. So when whole lot of people takes something absolutely for granted, I feel a bit uncomfortable.

It is high time that investors (or call them gamblers) stop blaming others for their greed and stupidity and start thinking for themselves.

[arghyas]

Hi Alchemist,
I still do not have the refund for my Rel Power IPO. Can you please tell me if I should wait any more, or lodge a complaint?? If I complain, who would it be to??
Waiting for your response.

[Alchemist]

Originally Posted by arghyas

Hi Alchemist,
I still do not have the refund for my Rel Power IPO. Can you please tell me if I should wait any more, or lodge a complaint?? If I complain, who would it be to??
Waiting for your response.

I have got refund for 2 applications; still waiting for third.

Wait till end of this week.

[spacenoxx]

Originally Posted by Alchemist

It is high time that investors (or call them gamblers) stop blaming others for their greed and stupidity and start thinking for themselves.

That Sir, is fact.

At the end of the day, one has to realise that everyone out there gives 'expert advice'. Its upto you how to interpret them and act. After all its your money at stake.