Reliance Power IPO opens Monday, tomorrow
How do u deal with this monster of an IPO in which most people subscribed mainly for listing gains? The so called grey market premium which was anywhere between 400 to 600 has fallen to a mere 175 and there will be little surprise if it falls close to its ipo price of 450 soon after listing, thanks to the leveraged purchases in the Hni n Retail catagory, those people who will get their fingers burnt. Even some evergreen bullish an analysts are putting sell recommendations at 600 on moneycontrol-whereas i see panic selling and shorting opportunities. Looks like the promoter will have to do a lot of managing if he will want to keep his and is illustrious fathers reputation, and have to spend some of the gains he makes on listing, from his pvt allotment at Rs17, but things will be interesting, and his market clout will be tested.
The rating agencies like CRISIL will also face some flack for its 4* rating of that issue if it tanks post listing.The mkts have been in a bad mood and things aren’t going to be positive Monday morning that is for sure.
IPO Markets have always been managed by the BRLMs and Promoters (even Government cos) as abundantly shown by the fancy ratings by bodies like CRISIL and the rapid withdrawals of bids by QIBs in the Emmar Mgf issue, at the time / after their IPO withdrawal announcement. Now its time for investors to take each issue at face value and prioritize rational thinking over greed.
Read my Reliance ipo post