1. As per market expectations, if the Reliance Power IPO gets oversubscribed 100 times, it will make Rs 11,70,000 crore which the company has to pay back the investor in 21 days.
2. Thus if the company parks these funds in a savings account for 3.5% interest, the company will be able to make Rs 3370 crore.
3. Moreover if the issue is oversubscribed 200 times, it makes Rs 23,40,000, on which interest of 3.5% works out to Rs 6775 crore for the company in just 21 days which is a large amount.
4. Thus SEBI must make it mandatory that these IPO's should not be asking more than 5% of the application amount, otherwise people money will be filling rich people coffers. IS MR Damodaran listening and in a position to take some action.
Amazing IPO Power Game: Reliance Power
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