Reliance Power, the power unit of Reliance Energy, which is also part of the Anil Dhirubhai Ambani Group, has filed a draft red herring prospectus for an initial public offering of the company's equity shares with the Securities and Exchange Board of India.

The draft red herring prospectus proposes an initial public offering (IPO) of 1.3 billion of Reliance Power’s equity shares with a face value of INR2, at a premium that will be decided by book building.

The issue includes a promoters’ contribution of 160 million equity shares, which will be allotted at the IPO price and will constitute 11.5% of the company’s post-issue paid-up equity capital. The remaining 1.14 billion equity shares will constitute the net issue to the public. This is equal to 10.1% of Reliance Power’s post-issue paid-up equity capital.

Reliance Power said that it is pursuing various gas, coal and hydro power generation projects in different parts of the country. The IPO is being undertaken to fund the development of these power projects.