Markets see RPL listing at 50 per cent premium

Market analysts are anticipating Reliance Petroleum (RPL) to debut on Thursday at more than a 50 per cent premium from its cut-off price of Rs 60.

The initial public offer, which was oversubscribed a record 50 times, is expected to list on the BSE and NSE in the Rs 76 to Rs 101 range.

"I am expecting it to list between Rs 88 and Rs 92. It may touch an intra-day high of Rs 101.30 and could also come down to Rs 76 on profit booking," said Roop Chand Betala of Betala Stock Broking.

The first quotes on the issue are expected to be between Rs 96 and Rs 98, according to merchant banking sources close to the issue. Positive cues on the stock were pronounced with Chevron picking up 5 per cent post-issue stake in the company at Rs 60.

The level at which the stock lists tomorrow and the subsequent range of its movements are expected to set the tone for the overall market on Thursday, as well. Brokers are expecting volumes at the RPL counter to be significant.

"What is doing the round of the markets is that it could be a three digit listing. I am Markets see RPL listing at 50% premium expecting record volumes at this counter. The amount of retail interest in the stock and the Reliance magic mean that transaction will surpass all previous records," said Ramesh Damani, a Mumbai-based broker.

Market experts are also predicting that RPL could be a prime contender for inclusion in the indices. "At over Rs. 35,000 crore in market capitalisation, RPL would certainly be in consideration, perhaps, to be in the Nifty fifty in the next couple of months," Betala said.

Despite the frenzy surrounding the issue and the listing, analysts are also cautious about the stock's valuations. "One must keep in mind that RPL is a company which is not in production on Wednesday," said R Sreesankar, head-research, IL&FS Investsmart.

Market watchers are drawing comparisons between the current euphoria around RPL listing to that of earlier days when Dhirubhai Ambani and the various Reliance entities were the favourites of the retail investors.

While earlier issues were no less exciting, the fact that they did not use the book building route to enter the markets made it less complicated for investors, say market analysts.

With the onset of electronic trading and manifold jumps in volumes since then, Reliance has become even more important to investors now, said an analyst.

With the problems between the Ambani brothers sorted, the Reliance companies are now re-focussed on growing the markets and their share in them.

"Reliance has always had its own charm in the market and it has proved itself to be a bellwether stock," Damani added.