Mumbai: Anil Ambani group on 28 December got the regulatory go-ahead from SEBI for the public issue of Reliance Power Ltd -- the group’s first IPO and estimated to raise about $3 billion, the highest ever proceeds in India.
Securities and Exchange Board of India has issued its observations on the draft prospectus of RPL, while clearing the way for IPO, sources close to the development said.
The public offer by the ADAG firm Reliance Energy’s subsidiary is expected to be launched early next year and could raise over $3 billion, eclipsing the public issue of realty giant DLF, which had raised more than $2 dollars and is the biggest ever IPO so far.
The go-ahead comes a day after SEBI disposed off a complaint against the IPO, while saying that “the entire promoter quota, that is, 20% of the capital in RPL shall be locked in for a period of five years from the date of allotment in the proposed IPO.”
Reliance Power had filed its Draft Red Herring Prospectus on October 3 this year.
In its last primary market update on processing status of draft offer documents, SEBI said on 20 December that it was awaiting clarifications from the lead managers of the IPO before issuing its observations.
On Thursday, a two-member bench comprising members T C Nair and V K Chopra, accordingly disposed off the case it was hearing following an order by Mumbai High Court on a PIL.
While SEBI wanted full disclosure by promoters and the lead managers as per the various statutes and guidelines to protect the interest of investors, it did not take up the issue of ‘short charging of shareholders´ due to transfer of projects from ADAG group company Reliance Energy Ltd to RPL.
“We are leaving this issue open for the complainant to take up with appropriate forum,” SEBI ruled, adding that it did not have jurisdiction to deal with allegations that could be a subject matter of oppression and mismanagement of the company by its promoters.
SEBI, however, noted that Ministry of Corporate Affairs had informed that “prima facie there does not appear to be evidence at this stage to establish a violation” of certain sections of the Companies Act, 1956, relating to transfer of projects from REL to RPL.
SEBI, however, said REL shareholders can approach Corporate Affairs Ministry if they “perceive any mismanagement or oppression by the management of Reliance Energy”.
SEBI had started hearing the case early this month and gave a ruling after it heard both sides since 4 December. Following the reply filed by RPL on 7 December, the complainant sought time till 26 December to file additional rejoinder but did not do so.