MUMBAI (AFP) — Shares in Reliance Power, India's biggest ever stock flotation, slid almost five percent Tuesday having already plunged on their trading debut as US economic woe saps investor confidence, dealers said.
The firm raised 2.9 billion dollars in just sixty seconds in a hugely popular initial public offering in January, but its shares are down some 21 percent since they began trading on Monday.
Disappointed private investors, who just a few weeks ago were dreaming of riches following a long boom in Indian shares, were among the heaviest sellers, dealers said.
"Investors turned a bit jittery after Monday's event. The expectations of a huge premium on listing have vanished," said a dealer with a state development bank, on condition of anonymity.
The slide comes as a credit crunch spreading from the ailing US economy continues to roil share prices and cast a pall over the global economy. Two firms have cancelled planned Indian listings because the of the turmoil.
Anil Ambani, one of India's richest men, created Reliance Power to build a dozen major power plants in a country starved of sufficient electricity to meet demand.
"Reliance Power is a strong growth story over a two-three year period. The current market sentiment has impacted the stock," said Amitabh Chakraborthy, the president for equity at Religare Securities.
The firm's share offer was hugely oversubscribed and it now has more than four million private investors, the world's largest number, Ambani has said.
But a plunge in global stocks since the share offer due to a looming recession in the US, a key buyer of Asian goods and services, has raised fears that the poor performance of Indian shares in 2008 is a sign of things to come.
Reliance Power shares opened at 450 rupees (11.54 dollars) on Monday before tumbling more than 17 percent. They fell 4.82 percent on Tuesday to 354.55, worse than the slight fall in the overall stock market.
Copyright © 2009 AFP. All rights reserved. More »
