Page last updated at 11:54 GMT, Monday, 11 February 2008

Reliance Power falls 17% on debut

Reliance Power boss Anil Ambani
Reliance Power is run by Anil Ambani

Shares in power plant builder Reliance Power, which was India's biggest stock market flotation slumped 17% on debut.

They were priced at 450 rupees ($11.54; 5.82), but fell sharply during its first day on the Bombay stock exchange.

Analysts are concerned Reliance Power's shares were overvalued after growing concerns about the effect of the global credit crisis.

The company's shares sold out in sixty seconds when they were offered for sale to investors in January.

Reliance Power plans to build more than a dozen power plants over the next 10 years to meet the increasing energy demands of India's fast growing economy.

'Outrageous'

Reliance's billionaire chairman Anil Ambani dismissed claims the shares were overvalued, saying: "The potential of India's power sector remains strong."

One broker called the valuation "outrageous", while Angel Broking's Girish Solanki said: "The valuations must be seen in conjunction with the fact that currently Reliance Power has hardly any capacity which is operating."

Reliance's disappointing opening comes less than a week after property developer Emaar MGF Land postponed its Indian flotation, citing stockmarket uncertainty.

Reliance Power's fall affected India's main Sensex index, which closed down 4.8% at 16,631.

There were a record number of share listings in India in 2007, but concerns about the global credit crisis are believed to be hitting investor confidence.




SEE ALSO
Reliance Power float raises $3bn
15 Jan 08 |  Business
Mittal tops table of India's rich
15 Nov 07 |  Business
Reliance launches retail venture
03 Nov 06 |  Business
Indian retailer defends expansion
14 Oct 07 |  Business
Demand sparks India's power play
26 Jan 07 |  Business

RELATED INTERNET LINKS
The BBC is not responsible for the content of external internet sites


FEATURES, VIEWS, ANALYSIS
Has China's housing bubble burst?
How the world's oldest clove tree defied an empire
Why Royal Ballet principal Sergei Polunin quit

BBC navigation

BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.

Americas Africa Europe Middle East South Asia Asia Pacific