Bonus record date powers Reliance Power

Reliance Power gained 2.05% to Rs 419.60 at 13:43 IST on BSE, extending its recent rally, ahead of the record date for bonus issue.

From Rs 387.50 on 25 April 2008 - the day when the company set 2 June 2008 as the record date for bonus issue, the stock has gained 8.28%.

On BSE, 49.60 lakh shares were traded in the counter. The scrip had an average daily volume of 54.48 lakh shares in the past one quarter.

The stock hit a high of Rs 426.90 and a low of Rs 406.65 so far during the day. The stock had a 52-week high of Rs 599.90 on 11 February 2008 and a 52-week low of Rs 303.45 on 24 March 2008.

The large-cap scrip had outperformed the market over the past one month till 7 May 2008, advancing 17.12% compared to the Sensex's return of 11.24%.

The company's current equity is Rs 2,259.82 crore. Face value per share is Rs 10.

At the current price of Rs 419.60, the scrip trades at a PE multiple of 999.04, based on full year ended March 2008 EPS of Rs 0.42.

In a meeting held on 25 February 2008, Reliance Power's board of directors approved 3:5 (3 bonus shares for every 5 shares held) bonus issue to all shareholders, excluding the promoter group comprising of Reliance Energy and the Anil Dhirubhai Ambani Group (ADAG).

In a related development, Anil Ambani, Chairman, Reliance ADAG simultaneously announced a voluntary contribution of 2.6% of his shareholding in Reliance Power to Reliance Energy, to prevent Reliance Energy from any dilution of its existing 45% stake in Reliance Power, as a result of the bonus issue.

Following bonus issue and personal stake transfer by Anil Ambani, the cost of acquisition of Reliance Power stock will come down by 40% for retail shareholders to Rs 269 per share from issue price of Rs 430 per share. In the same way, for other investors the acquisition cost will be reduced by 37% to Rs 281, from issue price of Rs 450.

Following this bonus issue, Anil Ambani's stake will come down to 40% from the present 45%. Reliance Energy's shareholding remains unchanged at 45% while public shareholding will increase by 5% to 15%.

Reliance Power is developing 13 power generation projects with a capacity of 28,200 megawatt (MW).

Reliance Power reported net profit of Rs 94.67 crore on total income of Rs 132.87 crore in full year ended March 2008.