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Reliance Infrastructure gives up IPO

NEW DELHI: Faced with choppy market conditions and huge losses incurred by the group companies in the stock market turmoil, Anil Dhirubhai Ambani-owned Reliance Communications is understood to have decided not to go ahead with the estimated Rs. 6,000 crore initial public offering (IPO) of Reliance Infrastructure Limited.

Reliance Infratel, the tower business arm of the group’s telecom entity Reliance Communications, has decided not to go ahead with the IPO for the present is indicative from the lapse of the regulatory approval it had got for the same.

On the secondary market, Reliance Infrastructure, formerly Reliance Energy, has logged the biggest loss among the top 30 blue chip companies in the seven-month downslide at the bourses and the group as a whole has lost market value worth over Rs. 200,000 crore in the same period. The IPO had got a regulatory approval with market regulator Securities and Exchange Board of India’s (SEBI) issuance of observations on the draft red herring prospectus on May 12. As per the norms, it was required to close the IPO within 90 days of issuance of SEBI’s observation, a period that ended on August 11. The group had announced the IPO for telecom tower firm Reliance Infratel, which was estimated to raise close to Rs. 6,000 crore in February.

However, the battering of Reliance Power right from the day of its listing in the stock exchange changed everything. Reliance Power slipped below its public issue price on debut trade. At present, it is trading with a heavy discount.

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