Reliance Power to consider bonus!

Reliance Power Ltd. today informed the stock exchanges that a meeting of its Board of Directors has been convened on Sunday, February 24, 2008.

The Reliance Power Board will inter alia consider a proposal for issuing free bonus shares to all categories of shareholders, excluding the promoter group (comprising of Reliance Energy Ltd. and the ADA Group), and/or other measures, which will result in reduction of the cost of Reliance Power Ltd. shares below the IPO price of Rs. 430 per share for retail investors, and Rs. 450 per share for institutional and other categories of investors.

In a statement the company mentioned, “The decline in the Reliance Power stock price has been compounded by:
• a vicious and orchestrated campaign of market manipulation and market abuse
• unleashed by unscrupulous rival corporate interests
• to hammer down all Reliance ADA group stocks
• in an attempt to undermine our fair name and reputation, and
• cause losses to millions of genuine investors.”

Reliance Power has formally written to SEBI seeking an investigation into the same.
Equity shares, by their very nature, are risk-bearing instruments, and there is no obligation on behalf of any issuer to insure investors against possible losses.
However, in keeping with the Reliance ADA Group’s fundamental and over-riding philosophy of creating value for genuine long term investors, the Board of Directors of Reliance Power will be meeting as above, to consider appropriate one-time measures which will result in reduction of the cost of Reliance Power shares below the IPO price, the statement added.
This will include inter alia consideration of a proposal for issuing free bonus shares to all categories of shareholders, excluding the promoter group (comprising of Reliance Energy Ltd. and the ADA Group), thereby protecting investors even from notional short-term losses on their shareholdings.
The proposal will result in dilution of the promoter group’s shareholding in Reliance Power, which they have indicated they will accept in the broader interest of protecting and enhancing value for over 4 million institutional and retail investors