R-Power M-cap to exceed Rs 50k cr on merger move

Anil Ambani Group company Reliance Power's valuation is likely to exceed Rs 50,000 crore if a proposed merger with another ADAG group firm RNRL comes through, but this would be less than half of what the company was worth when it debuted on the stock market.

Reliance Power commands a market cap of about Rs 41,000 crore at present, while Reliance Natural Resources' (RNRL) m- cap stands at about Rs 10,000 crore. The two companies announced today that their boards would meet separately on July 4 to consider the merger of RNRL with Reliance Power.

The current valuations peg the market cap of the combined entity at about Rs 51,000 crore.

But this compares poorly with the Rs 1.23 lakh crore market cap that Reliance Power commanded on February 11, 2008 -- the day

The company got listed on the stock market after a Rs 11,500 crore IPO, the biggest so far in India's history.

The listing saw Reliance Power catapulting into the elite league of Rs 1-trillion companies, with the scrip touching an intra-day high of Rs 599.90.

But it slipped below the IPO price of Rs 450 a piece, making its membership in the Rs 1-trillion (Rs 1 lakh crore) market cap group short-lived.

On the same day itself, the stock slipped to an intra-day low of Rs 386 a share at the National Stock Exchange.

With its market cap of Rs 41,000 crore, Reliance Power is ranked 30th in the stock market.

Reliance Power had mopped up Rs 11,560 crore through its initial offer, attracting over five million bids from all categories of domestic and international investors. It had created a demand for shares worth over Rs 7,50,000 crore, resulting in the offer being oversubscribed by about 73 times.