Reliance Power – the company which has a record 28,200 MW of power generation capacity in the pipeline – expects its shares to be listed on the bourses by the first week of February, company chairman Anil Ambani announced today.
Reliance Power will offer its shares for sale to the public from Jan 15-to-18 at a price band of Rs 405-450 per share. The share sale, aimed at mobilising up to Rs 11,500 crore, would be the country’s biggest mop-up through an initial public offer.
This offer would also chalk another first. It will be the first issue where retail investors will get a discount of about 5%.
Ambani ruled out a pre-IPO placement – “despite a number of requests for such deals”, he said at a press meet in Mumbai.
Reliance Power currently has no plant in operation.
The proceeds of the issue will be used for the projects like Rosa and Urthing Sobla in Uttar Pradesh, Sasan in Madhya Pradesh and Butibori and Shahapur in Maharashtra.
He said that the company would take the subsidiary route to develop the capacity in the pipeline. He also said that the company will not be limited to coal and gas fired plants, but will also invest in wind power and nuclear power.
A foray into power equipment manufacturing is also on the cards though this will not be through Reliance Power or through Reliance Energy, which holds 50% of Reliance Power.
The company plans to hire 5,000 people to build and man its power plants.
The issue will constitute 11.5% of the post issue paid-up capital of the company.
Reliance Anil Dhirubhai Ambani Group (R-ADAG) could also foray into the manufacturing of power equipment, and is currently in talks with global power equipment majors for possible joint ventures.
''This is to meet the cost and delivery schedules of our power projects,'' Ambani said.
This venture will neither be under Reliance Power nor Reliance Energy but under a different entity altogether, Ambani added.
Understanding Short Term Trading
Before I begin, this blog is not for intraday traders. My definition of short term implies duration of around 2 to 3 months.
Short Term stock picking is no rocket science, but rather a visual interpretation of technical charts. A basic moving average on a time frame chart will show the direction of the securities movement.
Moving averages is a mathematical results calculated by averaging a number of past data points. Moving averages (MA) in it's basic form is calculated by taking the arithmetic mean of a given set of values on a rolling window of timeframe. Once the value of MA has been calculated, they are plotted onto a chart and then connected to create a moving average line. Typical moving averages used for short term trading are 50 MA and 100 MA.
Types of Moving Averages
1) Simple Moving Average (SMA)
SMA is calculated by taking the arithmetic mean of a given set of values on a rolling window of timeframe. The usefulness of the SMA is limited because each point in the data series is weighted the same, regardless of where it occurs in the sequence. Critics argue that the most recent data is more significant than the older data and should have a greater influence on the final result.
2) Exponential Moving Average (EMA)
EMA overcomes the limits of SMA, where more weight is given to the recent prices in an attempt to make it more responsive to new information. When calculating the first point of the EMA, we may notice that there is no value available to use as the previous EMA. This small problem can be solved by starting the calculation with a simple moving average and continuing on with calculating the EMA.
The primary functions of a moving average is to identify trends and reversals, measure the strength of an asset's momentum and determine potential areas where an asset will find support or resistance. Moving averages are lagging indicator, which means they do not predict new trend, but confirm trends once they have been established.
A stock is deemed to be in an uptrend when the price is above a moving average and the average is sloping upward. Conversely, a trader will use a price below a downward sloping average to confirm a downtrend. Many traders will only consider holding a long position in an asset when the price is trading above a moving average.
In general, short-term momentum can be gauged by looking at moving averages that focus on time periods of 50 days or less. Looking at moving averages that are created with a period of 50 to 100 days is generally regarded as a good measure of medium-term momentum. Finally, any moving average that uses 100 days or more in the calculation can be used as a measure of long-term momentum.
Support, resistence and stoploss can be infered by referring the closet MA below or above the market price. The other factor that is used in short term momentum is the trading volume. The moving averages along with the trading volume can provide a better insight to short term movement.
Markets are moved by their largest participants - I believe this is the single most important principle in short-term trading. Accordingly, I track the presence of large traders by determining how much volume is in the market and how that compares to average. Because volume correlates very highly with volatility, the market's relative volume helps you determine the amount of movement likely at any given time frame--and it helps you handicap the odds of trending vs. remaining slow and range bound.
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