Indiabulls Power saw upbeat investors response for its initial public offering (IPO) on day one. The IPO garnered bids for 165.67 crore shares as against 27.86 crore shares on offer.

Indiabulls Power will issue a total of 39.07 crore shares in a price band of Rs 40-45 per share in the IPO which remains opens between 12 and 15 October 2009. The company aims to raise about Rs 1,750 crore at the top end of the price band.

On 9 October 2009, Indiabulls Power sold the maximum allowed 30% of the tranche reserved for qualified institutional buyers (QIBs), or 18% of the total IPO, to the eight anchor investors at a price of Rs 45 a piece.

According to a statement, approximately 2.1 crore shares, or 34% of the shares available to anchor investors went to Copthall Mauritius Investment, while BNP Paribas and the Nomura India Investment FundMother Fund (together with a trust company) bought 1.05 crore and 1.08 crore shares respectively. The other anchor investors were Indea Capital, the Norwegian government petroleum fund, Credit Suisse Singapore and Macquarie Bank.

Indiabulls Real Estate currently holds 71.4% in the Indiabulls Power. UK-based billionaire L.N. Mittal's LNM India Internet Ventures holds a 10.7% stake, while private equity firm FIM holds the remaining 17.9%.

Indiabulls Power, a subsidiary of Indiabulls Real Estate, has been established with the objective to develop, construct and operate power projects. The company is currently executing five coal based power projects totalling 6,615 megawatt (MW) generation capacities. The company proposes to set up power plants in Maharashtra (Amravati and Nashik) and Chhattisgarh (Bhaiyathan). The management has indicated that the first power plant would be commissioned at Nashik in 2011-12.

The proceeds of the proposed IPO will part finance the construction and development of the 1,320 MW Amravati Power Project Phase I, fund equity contribution in the company's wholly owned subsidiary to part finance the construction and development of 1,335 MW Nashik Power Project, apart from general corporate purposes.

Credit rating agency CRISIL has assigned IPO Grade "3/5" to the proposed initial public offer of Indiabulls Power, which indicates that the fundamentals of the issue are average relative to other listed equity securities.