Reliance Petro sold 7.5 times

The initial public offer of Reliance Petroleum today opened with a bang and was subscribed 7.5 times at the end of Day One. The IPO was subscribed three times within 10 minutes of its opening.

But the participation of retail investors was not very impressive on the opening day. They applied for 17 per cent of their entitlement. The QIB (qualified institutional bidders) portion was subscribed 11 times, while the high net worth portion was subscribed 8.32 times.

Thirty per cent of the IPO is available for retail investors, 10 per cent for high net worth individuals and 60 per cent for institutional buyers.

Investment banking sources said the issue, which offered 450 million shares for sale, received tremendous response for a combination of factors.

"Reliance Petroleum has made bidding for the issue easy for retail shareholders as they are subject to only Rs 16 against a price band of Rs 57-62. In addition, an overall bullishness is prevailing in the market. Global energy major Chevron's announcement yesterday that it would pick up a 5 per cent stake in Reliance Petroleum at Rs 60 apiece added fuel to the fire," said an investment banker.

The shares are expected to be listed on the stock exchanges between May 5 and May 10. The issue will close on April 20. Reliance Petroleum will utilise the proceeds of the issue to part-finance the Rs 27,000-crore refinery being set up in a special economic zone at Jamnagar.