Heavy outlay on ultra-mega power projects
MUMBAI: Anil Ambani Group’s Reliance Energy is expected to decide on Sunday on taking public its subsidiary Reliance Power Ltd. in an issue estimated at $2-3 billion, a move that can value the company at over $20 billion.
The Board of Reliance Energy would meet on Sunday to “consider every opportunity for growth and unlocking of shareholders’ value,” the company said in a statement to the stock exchanges.
The IPO for Reliance Power, which recently bagged the 4,000 MW Sasan power project, is considered to be part of revenue mobilisation exercise for its estimated Rs. 1,00,000 crore investment plans. The meeting follows reports that the company was looking at an initial public offer of $2-3 billion (up to Rs. 12,000 crore) shortly.
According to industry sources, over half a dozen bankers, including Kotak, Enam, JM Financial and UBS, were reportedly involved in the deal, but none of them could be contacted for confirmation. When contacted, an REL spokesperson said, “as a matter of policy we would not like to comment on speculation.”
Besides the Sasan project, Reliance Power is believed to be working on power projects totalling 25,000 MW.
REL shares scaled a new life-time peak of Rs. 1,220 earlier on Friday and settled nearly eight per cent up. It had gained close to nine per cent on Thursday on reports that the company was planning to restructure its businesses. REL shares had gained close to 60 per cent over the past one month, triggered by talks about some major business plans in the offing, market players said.
The IPO is believed to be the largest ever in the Indian stock market, exceeding the size of realty giant DLF’s recent IPO that raised close to Rs. 9,000 crore.
If it goes through, the public issue would give Reliance Power an initial market capitalisation of about $20 billion (Rs. 80,000 crore) and place the company among top 20 most valued firms listed on the domestic bourses. — PTI