The Reliance Power Board has approved a bonus issue of 3:5 shares, which essentially means that the company will issue 3 shares for every 5 held. Chairman, Anil Ambani says that the bonus share issue is only for non-promoters.

The company says that the number of retail shareholders have increased in the last 10 days. The bonus is said to reduce IPO cost to Rs 269 for retail investors, to protect dilution of REL stake in Reliance Power. REL will be compensated by making up 2.6% from Ambani's own stake.

Ambani said that his personal stake in Reliance Power has been diluted to 40% versus 45%. He added that the public will hold 15% in Reliance Power.

Ambani said, “This will effectively reduce the cost of the Reliance Power shares. From the IPO price of Rs 430 and Rs 450 for retail and institutional categories -the retail shareholders will receive the shares at Rs 269 per share and the institutional will receive them at Rs 281 per share”.

The free shares won't be given to Anil Ambani and the founder group, including Reliance Energy - which together hold a 90 percent stake. Anil Ambani will compensate promoter Reliance Energy by diluting his personal stake in Reliance Power. 

“What I will be doing in yet another unprecedented step, is contributing my personal share in Reliance Power free of cost to the Reliance Energy shareholders, whereby Reliance Energy holding in Reliance Power will remain intact at the 45% level”, Ambani said.