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reliance power bonus issue

student (WORKING) (757 Points)

02 July 2008

declaration of bonus issue is a positive sign for markets & therefore stock price also increases?

then why it is not such in case of reliance power

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2 Replies

Yogesh Modi (Service) (0 Points)
Replied 03 July 2008

I am a CA. the reason behind reliance power share price not increasing even after bonus issue is that

1. Weak global cues

2. Company has not started opeartion and there is no revenue at present and the revenue will start fllowing in for company only after year 2009-10. So there is no basis for the share price.

3. Bad track record of ADAG other group companies share prices which clearly shows that the prices are manupulated by market speculators.

4. Issue price of the share was very highly valued as compared to its already existing peer company i.e., NTPC whose price is Rs 180 even after so many years of operation.

5. Bonus issue was just the way of returning a little amount to you which was paid by you to the company at the time of issue.