The founders have bought 32 million shares at 450 rupees, while 228 million shares have been offered to the public.
"There is a huge demand especially from retail investors and also from high-net-worth individuals. We were expecting such a response," said Ambareesh Baliga, vice president at Karvy Stock Broking.
Reliance Power plans to build power plants across India using funds raised by selling 10 percent equity in the firm, which is 50 percent owned by utility Reliance Energy.
Reliance Energy shares were down 0.2 percent at 2,469.80 rupees, outperforming a Mumbai market that was down 0.8 percent.
The Indian stock market has been on a five-year record-breaking bull run and strong flows of foreign funds, including from investors seeking high returns in a market that has, for now, withstood the worst fallout from the U.S. 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.
Indian IPO volumes soared to a record in 2007 when $8.3 billion was raised from 91 issues, including real estate firm DLF's $2.3 billion issue, which until Tuesday was India's biggest IPO, according to data from Thomson Financial.
Indian companies are expected to raise $15.8 billion from 35 IPOs issues this year, almost twice as much as the record in 2007, according to Thomson Financial data.
"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.
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 toexploration and production of oil and gas, textiles, financial services, power, biotechnology and telecommunications.
The group was split in 2005 between Anil Ambani, who has interests in telecoms, financials, media and power sectors, and his elder brother Mukesh, who controls India's top listed firm, oil and petrochemicals giant Reliance Industries.
The Reliance Power issue is being managed by Kotak Mahindra Capital, UBS, ABN AMRO, Deutsche Equities, India Private Limited, Enam Securities, ICICI Securities, JM Financial and JPMorgan.
The benchmark index of the Bombay Stock Exchange rose 47.1 percent in 2007, recording its strongest growth in four years. It rose nearly 73 percent in 2003, 13 percent in 2004, 42 percent in 2005 and 46.7 percent in 2006.
In comparison, South Korea's Composite Stock Price Index gained 32 percent, China's Shanghai Composite Index soared 97 percent and Japan's Nikkei fell 11 percent in 2007.