Billionaire Anil Ambani's Reliance Power raised $3 billion within a minute on Tuesday when India's biggest initial public offering was fully subscribed as investors flock to new issues in the booming economy.

The issue was covered 10.5 times at the end of the first day of the issue, which closes on Friday, National Stock Exchange data showed, and the strong demand means the 10.1 percent stake in Reliance Power should be sold at 450 rupees ($11.5) per share, the top end of the IPO's price band.

The founders have bought 32 million shares at 450 rupees, while 228 million shares have been offered to the public, with a stock market debut pencilled in for early February.

"We haven't seen such oversubscription for a long time. There are expectations of big listing gains. That's why there is a frenzy," said Mehul Mukati, an analyst at Emkay Research.

Reliance Power plans to build power plants across India using funds raised by selling the stake in the firm, which is 50 percent owned by utility Reliance Energy Ltd.

Reliance Energy shares closed 4.4 percent lower, lagging a Mumbai market that fell 2.3 percent. Shares in the firm, a component of the benchmark index, are still up 10.8 percent in January after more than quadrupling in value last year.

Amid the market frenzy for the IPO, some analysts cautioned it was hard to value Reliance Power, which currently does not have any power plants, faces risks of land disputes and is not likely to report strong profits for four to five years.

"We are unable to accord any definite valuation to the company since it has no operational power assets," Emkay Research said in a note to its clients, recommending them to subscribe to the issue and then book listing gains.

Brokers and analysts say the demand for the stock means it could list at nearly double the offer price, which would value Reliance Power at more than NTPC Ltd., which has 28,000 megawatts of operating plants and another 50,000 megawatts planned in the next 10 years.

The Indian stock market has been on a five-year, record-breaking bull run partly driven by foreign funds, including from investors seeking high returns in a market that has so far withstood the worst fallout from the US subprime mortgage crisis.

The Indian market hit a record high of 21,206.77 last week, at which point it was up almost 54 percent from a low in August.    Foreign investors bought a record $17.4 billion of Indian stocks in 2007, including almost $9 billion in the last four months of 2007.

"The markets are doing very well and investors are getting good returns. There is a fair amount of investor appetite for IPOs," said Ved Prakash Chaturvedi, managing director at Tata Mutual Fund.

Indian companies are expected to raise $15.8 billion from 35 IPOs this year, almost twice as much as the record $8.3 billion in 2007, according to Thomson Financial data.

The 91 issues in 2007 included real estate firm DLF's $2.3 billion offering, which until Tuesday was India's biggest IPO, according to Thomson Financial.

"It all depends on the kind of money investors make. If you have made good money, then your risk appetite increases and then you do not examine the details of the IPO with a microscope," said Deepak Jasani, head of retail research at HDFC Securities.

IPOs in the pipeline include a $1.5 billion issue by the Indian arm of Dubai's Emaar Properties, UTI Asset Management's $500 million issue and JSW Energy's $1 billion issue.

Reliance Power has been helped by investors' faith in the family name as a result of the group of companies set up by Ambani's father, tycoon Dhirubhai Ambani.

Founded in 1958 to trade in synthetic yarn, the group expanded to include interests ranging from petrochemicals and refining to exploration and production of oil and gas, textiles, financial services, power, biotechnology and telecommunica