On the first look, the Reliance Power IPO looks like the most expensive IPO. In race to beat his elder brother Mukesh Ambani, Anil is raising money at a premium on ventures still on Paper and Brains 🙂
IPO money is being raised to execute about 7,000 MW of capacity expected to go on stream by 2012. If all goes perfectly [Remember, this is Anil Ambani’s first Manufacturing Mega Project and he has no experience in executing such projects on his own], Reliance Power will have revenues of Rs 7,600 crore, EPS of roughly Rs 8 and a book value of Rs 70. At the listing price of Rs 850, the stock would be trading at a 2012 price-earning ratio of 105, a price to book value ratio of 13 and a market cap to sales ratio of 26. Kindly remember these are four-year forward ratios.
As I have already said above, Anil has more plans in his brains and will only let them out once the Reliance Power stock is listed [Getting into manufacturing of Power Equipments etc] Its a MAD MAD MARKET for sure 🙂