All eyes on Rel Power listing for future cues

All eyes will be on billionaire Anil Ambani tomorrow to see if his maiden IPO can overcome the turbulence in stock market to fetch a good premium or will melt under pressure.

It will be test of not only investors' confidence in him but could also decide the future course of action in stock market as well.

Analysts believe the listing of Reliance Power could chart the way ahead for the market as a premium listing could help in improving the sentiments.

"R-Power would decide whether a next trigger for markets can do something for the market while pressure of global markets might try to pull down sentiments," brokerage firm SMC Global's Vice President Rajesh Jain said.

The benchmark index Sensex, lost about over 1,100 points in the past week falling from 18,660.32 point on February 4 to settle below the 18,000 level on Friday at 17,464.89.

"If the listing goes anywhere below Rs 550, retail investors would be highly disappointed which could lead to pandemonium in the market. Also, if the scrip falls below issue price then the overall market could also fall sharply," Arun Kejriwal of Kejriwal Research and Investment services (KRIS) said.

The uncertainty in the domestic market took its toll on the public offers of real estate firm Emaar MGF Land and leading healthcare services provider Wockhardt Hospitals, both of them withdrew their issue due to low investor response.

Marketmen said that the negative sentiments which led to the withdrawal of the two IPOs could also impact the Reliance Power if its fails to keep up to investor expectations.

"In the current market scenario, Reliance Power listing at Rs 550-600 against the issue price of Rs 450 can maintain market sanctity," Kejriwal added.

Besides, banking stocks had suffered last week on concerns that a rise in inflation could limit Reserve Bank of India's decision to lower interest rates.

The inflation for the the week ended January 26 rose to a six month high of 4.11 per cent from 3.93 per cent in the previous week, mainly due to a rise in prices of food articles and manufactured items.

The domestic market have been suffering from pressures from the global concerns and the US recession fears.

Foreign Institutional Investors have also been pulling out heavily from Indian markets due to the pressures in the global markets.

However, so far in February, FIIs have made net purchase in shares worth Rs 1,331.90 crore despite being net sellers on three days in the period.