Business Daily from THE HINDU group of publications
Tuesday, Feb 19, 2008
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Business Daily from THE HINDU group of publications Tuesday, Feb 19, 2008 ePaper | Mobile/PDA Version |
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Power Corporate - Bonus Announcements Markets - IPOs Our Bureau
Mumbai, Feb. 18 The share price of Reliance Power surged 7.66 per cent on BSE following the company’s Sunday announcement of a bonus issue of shares to non-promoter shareholders. But investor enthusiasm still couldn’t carry it past the original issue price. The scrip touched an intra-day high of Rs 429.60 and a low of Rs 410.10 before closing for the day at Rs 413.95. Mr. R Balagopal, Senior Vice President, Fedex Securities Ltd said, “Once the ratio (bonus) is announced investors can decide whether they will benefit by holding on to their shares” . Opinion in the legal community is divided on the legal implications of what is arguably a first of its kind – a company leaving out a class of shareholders for issue of bonus shares. One lawyer felt that the move should have a smooth passage since the proposal is backed by the promoters themselves who enjoy an overwhelming majority in Reliance Power. The company law, after all, allows an exception to the general rule of pro-rata entitlement if shareholders so decide by a three-fourth majority, he pointed out. But another lawyer felt that the issue is not so simple. Minority shareholders of Reliance Energy – the co-promoter in the venture – might see the act of self-denial by the company’s management as injuring their investment interests. Their legal response could muddy the waters, he added. Reliance Power proposes bonus shares to non-promoters Reliance Power goes below issue price on debut Reliance Power IPO issue price at Rs 450 More Stories on : Power | Bonus Announcements | IPOs
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