According to sources close to the development, the Chhattisgarh government is likely to soon announce the deal. Sterlite Industries and the GMR group were the other two major bidders for the project.

The Chhattisgarh government had called bids for the sale of 65% of power produced from the project. Indiabulls quoted Rs 0.81 per kilowatt hour while Sterlite Industries’ bid was learnt to be at Rs 0.882 per kwh. GMR’s bid price was Rs 0.885 kwh. The total cost of the project is Rs 8,000 crore and it will be completed within three years.

Unlike an ultra-mega power project where 100% power has to be sold at a levelised tariff, 35% of power produced from the Bhaiyathan project is available for merchant sale, which is expected to average out overall realization of the total power produced by the plant.

There were a total of 10 bidders including Reliance Power and Tata Power. All bids were on the basis of levelised tariff that considered escalation of prices over time. With international coal prices touching $100 per tonne, pit-head plants provide attractive opportunity for power producers. Indiabulls had recently raised Rs 1,600 crore from steel tycoon LN Mittal and Farallon Capital by placing 28.6% equity to pursue its power business. Indiabulls Power Services is also setting up two mega thermal power plants in Maharashtra with an aggregate capacity of 3,960 mw.

Indiabulls Power has also signed an agreement with the government of Arunachal Pradesh for four medium-sized hydro projects in the state, where feasibility studies are in progress.

For a few minutes, that aim seemed to be within reach. The stock started trading at a robust 548 rupees ($13.86) and Reliance watchers sighed with relief. Then the bottom fell out. By the end of the day the stock was down 17%, taking the Sensex stock index down to its third-biggest recorded drop. The stock fell another 4.9% day before yesterday.

Reliance was not the first to run into IPO problems. Last week, Wockhardt Hospitals, a thriving medical firm, cancelled a $165-million (U.S.) IPO. It was followed by Emaar MGF, a real estate giant based in Dubai that planned a $1.8-billion listing, the second largest in the property field.