Naveen Jindal-led Jindal Power Ltd. (JPL) on Thursday said it planned to raise up to Rs.10,000 crore through an initial public offer (IPO), the second-biggest, for which it would approach the Securities and Exchange Board of India later this month.
The decision came at a board meeting of Jindal Steel and Power Ltd. (JSPL), which controls Jindal Power, the company said.
“We will approach SEBI with draft prospectus before the end of this month for an issue, possibly by March next year,” JSPL Vice-Chairman and Managing Director Naveen Jindal told PTI.
On the issue size, Mr. Jindal said the approval was for up to Rs.10,000 crore to be raised, but the number of shares to be sold would be finalised later. The issue would be for a minimum of 10 per cent equity, said Mr. Jindal, who is also the Chairman of Jindal Power.
Given the size, the company could get a market cap of Rs. 1 lakh crore after listing.
The proposed IPO would be the second biggest IPO in India after that of Anil Ambani group’s Reliance Power, which had raised over Rs.11,500 crore in early 2008. As of now, ONGC’s public issue worth Rs.9,500 crore in 2004 is the second biggest.
Jindal Power has set up the country’s first mega power project — 1,000 MW O P Jindal Super Thermal Power Plant at Raigarh in Chhattisgarh.
This year has seen a spate of IPOs from the power sector, including that of state-run NHPC, IndiaBulls Power, Adani Power and JSW Energy. While these IPOs were well-subscribed, they had a subdued listing and are trading below the issue price.
JSW Energy IPO closed on Wednesday and is yet to be listed.
Reliance Power shares too are trading below the issue price, while that of REC, whose IPO happened in 2008, has managed to give decent returns to investors.
JSPL shares closed one per cent up at Rs.731.05 on the Bombay Stock Exchange on Wednesday.
For the proposed expansion of its thermal power plant, Jindal Power is looking to invest over Rs.13,000 crore — over Rs.10,000 crore in debt and the balance through internal accruals.
Boilers from BHEL
It has already placed orders with BHEL for supply, erection and commissioning of 4 x 600 MW boiler turbine generation package. The initial 1,000 MW power plant had four turbine generators of 250 MW each, also supplied by BHEL.
Jindal Power has also signed an MoU with Jharkhand for setting up of 2,640 MW thermal power plant.
In the hydro sector, it has signed an MoU with the Arunachal Pradesh Government to develop Etalin 4,000 MW and Attunli 500 MW hydroelectric projects in joint venture with the Hydro Power Development Corporation of Arunachal Pradesh Limited.
Besides, it is working on wind and solar projects.
In the quarter ended September 2009, JPL posted net sales of Rs.891 crore and a profit after tax of Rs.514.71 crore.