Reliance Power IPO - How Many Shares Will You Get?

Reliance Power IPO oversubscription stories are flying aroung on the internet and TV channels constantly. As a retail investor how many shares can you realistically expect? Here's the take on it

As on 15th Janury, contrary to what the channels and brokers are saying, Retail has not even been fully subscribed (been subscribed 0.8 times on 15th as per the official NSE website). What does it mean? It means that the IPO has allocated 30% of the total shares offered for retail investors, those investors that can invest not more than Rs 1 lakh. For this 12000 Cr IPO that means roughly Rs 3600 crores. The IPO that came nearest to it, DLF, offered 2700 crores for retail investors and that was undersubscribed.

Now as is being popularly assumed, for retail investors to get just 15 shares (on applying for 225 shares), the retail portion has to get oversubscribed 15 times. Rs 3600 * 15, ie Rs 54000 crores retail money has to be applied in that case which doesnt seem likely. But as with all things Reliance we will have to wait and see.

If say, the retail portion gets oversubscribed 5 times (5-7 times seemed to be the estimate before the IPO) the investor will likely get 45 shares. So those investors who have paid Rs 25875 @ 115 per share, they will get a refund of Rs 6525 and 45 shares

If say the retail portion gets oversubscribed 3 times, which I think is likely now, the investor will get 75 shares and will have to pay Rs 6375 (if applied at Rs 25875 @ 115 per share.

So happy money making!