Rel Power IPO: Grey market sees Rs 2k cr loss

AHMEDABAD: The dismal debut of Reliance Power on the bourses may result in losses to the tune of Rs 2,000 crore in the grey market. Operators also fear a payment crisis as many investors are threatening to hold back payments.

Grey market players — both operators and investors — who were expecting the stock to list in the range of Rs 550-Rs 600 per share, were in shock as Reliance Power opened at Rs 430 and closed at Rs 372.50 on its first day on the exchanges.

This could also adversely impact the premium transactions in forthcoming IPOs (initial public offers).

Ever since the grey market began trading in this IPO, the premium on Reliance Power shares had peaked at Rs 450 over and above IPO price of Rs 450 per share. Majority of trading in R-Power IPO in the grey market was done at an average premium of Rs 300 per share.

As the issue closed at Rs 372.50, most market operators, who had taken huge exposures, have lost Rs 377 per share. It is estimated the grey market has already taken an exposure of five crore equity shares, leading to losses worth Rs 1,900 crore.

It is also learnt that many investors in Jaipur have refused to honour their payment commitment to grey market operators in Ahmedabad, as the IPO plunged after listing. This could well result in operators losing out on large sums of money and have a cascading effect in the market.

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