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Indiabulls Power IPO, worth Investing?

This article was posted on Oct 12, 2009 and is filed under Stock Views

Indiabulls power’s IPO, with an issue of 39 crore equity shares, having a offer price of Rs 40-45 per share with face value of Rs 10 each, the issue would mop up Rs 1,560-1 ,760 crore, and would represent 19% of post dilution equity capital. The proceeds would go for power projects at Amravati, Phase I and at Nashik.

Sify: An up to $380 million IPO of utility Indiabulls Power Ltd was subscribed within half an hour of opening on Monday, underscoring the robust appetite for Indian new share offerings.

This is the first time the company is setting huge power generation capacities, it does not have prior expericnce in such large projects, which give arise to a number of questions such as will the compnay be able to complete the projects on the given deadline or not??

It can be risky bet to invest in, a risky investor might consider subscribing it in small quantity.

Analysts believe that investors willing to put in money in the IPO should have a longer time frame to reap returns.

“Project operations would have a gestation of 4-5 years. Investors with long term investment horizon can buy in the IPO as for short term better power scrips are available in the market,” SMC Capital Equity Head, Jagannadham Thunuguntla said – Sify Finance

IPO Details

Price Band: Rs 40-45

Net issue size: Rs 1,563-1 ,758 crore

Date: October 12 – 15

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