Shares of Reliance Power plunged on Friday as it began to trade ex-date. The street was expecting the stock to quote around Rs 270 per share post bonus issue. However, contrary to market expectation, the stock tumbled even further.
At 10:28 am, the stock was trading at Rs 248.45, down 39.34 per cent from its previous close of Rs 409.55 on the BSE. It may look like a sharp fall, but factoring in the issue of 3 bonus shares for every 5 held, the slide is just 3 per cent.
The cost of 5 shares at Thursday’s closing price would be Rs 2,047.75. Adding 3 bonus shares for every 5 held, the average price of a Reliance Power share turns out to be Rs 256.
For retail investors, who had bought the shares at IPO price of Rs 430, the average price post bonus would have been around Rs 270 per share. However, the stock is down around 8 per cent from the IPO price.
"Since it will take a couple of years for the facilities to become operational, we expect the stock to remain rangebound for the next 6-8 months between Rs 240-Rs 270 per share," said an analyst from a local brokerage firm.
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