Reliance Petro sets IPO price at Rs 60

Reliance Petroleum Ltd (RPL) has set a price of Rs 60 per share for its initial public offer, aiming to raise Rs 2,700 crore. The company had set a price band of Rs 57 to Rs 62 set for the IPO of 450 million shares, which was oversubscribed by 50 times.

"It (the price) could have been set at the top end, but it is an investor-friendly gesture," a source close to the development said.

The price is the same at which its promoters Reliance Industries (RIL) sold shares to a clutch of investors in pre-issue placement as well as the world's fifth largest energy company Chevron Corporation.

The investors which participated in the pre-issue placement include private equity funds, financial institutions and RIL chairman Mukesh Ambani. The book building was conducted on the Bombay Stock Exchange and the National Stock Exchange.

The RPL issue evinced huge investor interest. The qualified institutional bidder portion was subscribed 68.2 times, while retail investors applied for 15.2 times of their quota. As many as 2.13 million applications were submitted by retail investors. The top two issues in terms of retail applications thus far were NTPC (1.422 million) and TCS (1.187 million).

Of the nine merchant bankers involved in the QIB procurement, domestic merchant banker, Enam Securities, mobilised the highest fund, procuring over $5 billion and cornering over 20 per cent of the QIB procurement.

Proceeds from the IPO will be used to part finance RPL's export oriented refinery being set up at an estimated Rs 27,000 crore. The new refinery, which will have capacity of 580,000 barrels per stream day and a 900,000 tonne per annum polypropylene plant is being set up at Jamnagar in Gujarat. The refinery is expected to go on stream by December 2008.