Reliance [Get Quote] Power (R-Power), which raised over Rs 12,000 crore (Rs 120 billion) in India's biggest initial public offering in January, will consider issuing bonus shares to its shareholders, excluding the promoter group.

The company, controlled by Anil Ambani's Reliance ADAG Group, has called a board meeting on Sunday (February 24), to consider the proposal and decide the ratio.

"The proposal will result in reduction of the cost of Reliance Power shares below the IPO price of Rs 430 for retail investors and Rs 450 for institutional and other categories of investors," a company statement today said.

This is the first time an Indian company has proposed bonus shares barely a week after listing on the stock exchanges.

Analysts interpreted the move as a desperate measure to shore up the price of the share that has consistently traded at a discount since listing on February 11. On Friday, the shares closed at Rs 384.70 on the Bombay Stock Exchange.

Some of them said this move might put a moral pressure on promoters of other big companies that have share prices trading at a discount to the issue price.

The proposal will result in a dilution of the promoter group's shareholding (89.9 per cent at present) in R-Power.

R-Power attributed the sluggish performance of the stock to the meltdown in the global and Indian equity markets and "a vicious and orchestrated campaign of market manipulation and market abuse by unscrupulous rival corporate interests."

The company has also formally written to the Securities and Exchange Board of India seeking an investigation.

The company said it would consider "other measures" also to reduce the cost of shares but did not elaborate. "The move will protect investors even from notional short-term losses on their shareholdings," the company said.

According to sources familiar with the developments, Electricite de France (EDF), the main electricity generation and distribution company in France, is close to picking up 5 per cent stake in R-Power.

However, this could not be confirmed. The IPO had attracted demand of about Rs 750,000 crore (Rs 7,500 billion) from nearly 500 institutional investors across the globe and 5 million retail investors.

R-Power has a market capitalisation of Rs 87,000 crore (Rs 870 billion) -- among India's 10 most valuable private sector companies, and a net worth of nearly Rs 14,000 crore (Rs 140 billion) -- among the top five private sector companies in India on this parameter. The company is implementing power projects of 28,000 Mw.