Nagpur-headquartered Abhijeet Group plans to raise Rs 1,500 crore through an initial public offer of its power business subsidiary, Abhijeet Power, by the end of the current fiscal 2010-11, top company officials told ET.
“We are going for an IPO to raise growth capital. We will be filing the draft red herring prospectus with Sebi (Securities and Exchange Board of India) by November,” said Abhishek Jayaswal, managing director of Abhijeet Power and group director. Promoters of the company may dilute 15-20% stake in the public issue.
The company has given the mandate for the equity issue to Enam Se-curities, Bank of America-Merrill Lynch, IDFC Capital, UBS, Axis Bank , and SBI Capital Markets.
With the benchmark indices inching closer to their lifetime highs, companies are gearing up to encash on investors’ optimism by hitting the capital market with equity issues. Besides Abhijeet Power, other power companies such as Avantha Power and Infrastructure and Jindal Power are also raising funds through IPOs.
Abhijeet Power, which does not have any operational power generation capacity as of now, is setting up projects aggregating to 2,761 megawatts (MW) to be commissioned in phases by 2014.
These projects include a 271 MW unit in Maharashtra, 1,080 MW plant in Jharkhand and a 1,320 MW plant in Bihar. The total invest-ment on these projects is pegged at Rs 14,864 crore, which includes Rs 11,588 crore of debt and Rs 3,276 crore of equity. The first unit of 61.5 MW at Maharashtra will start operation in November.
“In addition to this, we are also planning to develop capacity of 1,980 MW in the state of Jharkhand and Bihar. The financial closure for these projects would also be done by December,” Mr Jayaswal said.
The company aims at selling 60-70% of its electricity output through long-term power purchase pacts, while the balance would be sold on merchant power basis. It will supply 25% of its generation from the Bihar and Jharkhand plant to the respective state government.
“The key strength of our power generation facilities is that we have fuel linkages. Also, we have location advantage as our fuel sources are located close to plants making our generation cost effective,” said PN Krishnan, director.
Besides Mr Krishnan, who was earlier director (finance) with Essar Power, Abhijeet Power has also taken on board the former chairman and managing director of Bharat Heavy Electricals , K Ravi Kumar as an executive director.
The company’s Maharashtra plant would primarily supply electricity to the Multimodal International Hub Airport at Nagpur. The company has also won the bid to supply 55 MW power for three years starting from April 1, 2011, at a rate of Rs 4.80 per unit to Reliance Infrastruc-ture.
In Jharkhand, the company has a captive coalmine in Chitrapur vil-lage, and fuel linkages that will run the plant in the Latehar district. The power plant in Bihar will source coal from Mahuagiri coal mines, which has been allotted to Abhijeet Group and CESC , on a 50:50 sharing basis.
The Mahuagiri coal mine is estimated to have reserves of 220 million tonne. The company also has fuel linkage for its Ma-harashtra plant.
Abhijeet Power’s share issue will follow a series of initial public offers by private power utilities such as Adani Power, JSW Energy , and In-diabulls Power in 2009.
“We are going for an IPO to raise growth capital. We will be filing the draft red herring prospectus with Sebi (Securities and Exchange Board of India) by November,” said Abhishek Jayaswal, managing director of Abhijeet Power and group director. Promoters of the company may dilute 15-20% stake in the public issue.
The company has given the mandate for the equity issue to Enam Se-curities, Bank of America-Merrill Lynch, IDFC Capital, UBS, Axis Bank , and SBI Capital Markets.
With the benchmark indices inching closer to their lifetime highs, companies are gearing up to encash on investors’ optimism by hitting the capital market with equity issues. Besides Abhijeet Power, other power companies such as Avantha Power and Infrastructure and Jindal Power are also raising funds through IPOs.
Abhijeet Power, which does not have any operational power generation capacity as of now, is setting up projects aggregating to 2,761 megawatts (MW) to be commissioned in phases by 2014.
These projects include a 271 MW unit in Maharashtra, 1,080 MW plant in Jharkhand and a 1,320 MW plant in Bihar. The total invest-ment on these projects is pegged at Rs 14,864 crore, which includes Rs 11,588 crore of debt and Rs 3,276 crore of equity. The first unit of 61.5 MW at Maharashtra will start operation in November.
“In addition to this, we are also planning to develop capacity of 1,980 MW in the state of Jharkhand and Bihar. The financial closure for these projects would also be done by December,” Mr Jayaswal said.
The company aims at selling 60-70% of its electricity output through long-term power purchase pacts, while the balance would be sold on merchant power basis. It will supply 25% of its generation from the Bihar and Jharkhand plant to the respective state government.
“The key strength of our power generation facilities is that we have fuel linkages. Also, we have location advantage as our fuel sources are located close to plants making our generation cost effective,” said PN Krishnan, director.
Besides Mr Krishnan, who was earlier director (finance) with Essar Power, Abhijeet Power has also taken on board the former chairman and managing director of Bharat Heavy Electricals , K Ravi Kumar as an executive director.
The company’s Maharashtra plant would primarily supply electricity to the Multimodal International Hub Airport at Nagpur. The company has also won the bid to supply 55 MW power for three years starting from April 1, 2011, at a rate of Rs 4.80 per unit to Reliance Infrastruc-ture.
In Jharkhand, the company has a captive coalmine in Chitrapur vil-lage, and fuel linkages that will run the plant in the Latehar district. The power plant in Bihar will source coal from Mahuagiri coal mines, which has been allotted to Abhijeet Group and CESC , on a 50:50 sharing basis.
The Mahuagiri coal mine is estimated to have reserves of 220 million tonne. The company also has fuel linkage for its Ma-harashtra plant.
Abhijeet Power’s share issue will follow a series of initial public offers by private power utilities such as Adani Power, JSW Energy , and In-diabulls Power in 2009.
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