Reliance Power IPO has two Payment Options. Lot of investors are wondering as to which payment option to choose while applying for the Reliance Power IPO. Now looking at the two Payment Options, first one allows retail investors and HNI’s to pay just Rs. 115 per share, if applying at the cap price or cut off price. The balance should be paid on call. This option is not new for investors. ICICI Bank FPO also had a similar option. Most investors (including me) took this part payment option only to get caught in the confusion later, regarding converting the partly paid shares to fully paid shares. While the share prices zoomed, I was unable to sell, because the partly paid shares where not listed then. Also there was no option to convert the partly paid shares tp fully paid shares until the bank called for the remaining amount. Many investors are afraid they might endure the same fate in the reliance power IPO if the payment option 1 is selected. Also, though likely, it is still not clear whether in case of oversubscription the amount paid will be adjusted and the shares converted to fully paid shares if the retail category subscribes by 4 times the IPO issue size.

By using the second option, investors who want to sell on listing day, can take the safer route and pay the full amount. This way post allotment confusion can be avoided completely. However, this method does not ensure the optimum use of investable funds. The best bet would be to wait till the last day and estimate the number of times retail category subscription and then take a decision. If the retail category is subscribed more than 4 times, then the payment option 1 would be the best option to apply in the Reliance Power IPO. This is assuming Reliance Power Limited announces that in case of oversubscription the amount paid will be adjusted and shares would be made fully paid.

Coming to the lot size and the maximum shares retail investors can apply, it has clearly been mentioned in the DRHP that the maximum retail investors can apply in the Reliance Power IPO is 225 shares after taking into account the 5% discount offered to retail investors. Investors can only apply for 225 shares, no matter what payment option they choose to apply in the Reliance Power IPO. Lot size of Reliance Power IPO has been fixed as 15 shares per lot. Reliance Power IPO is a very safe IPO to invest in. The risk of applying in the IPO is almost NIL. Hence investors are advised to grab this opportunity to make some risk free (almost) returns. As mentioned earlier, Reliance Power IPO would be fully covered in this blog. I’ll keep posting updates on Reliance Power IPO Subscription details, payment options and Reliance Power IPO Allotment details frequently. Hence do keep checking this blog often and keep your self abreast with the latest happenings regarding Reliance Power IPO.

Update - This is to confirm that incase the part payment option is selected and Reliance Power IPO subscribes over 4 times, no further amount needs to paid on allotment since the refund amount will be adjusted against the balance payment required on allotment. It looks highly likely that the retail category in reliance power IPO will subscribe by atleast 4 times. Hence investors are advised to use the payment option 1 (part payment option) to apply in the Reliance Power IPO.