Jindal Power files DRHP for Rs 7,200-crore IPO

Jindal Power Ltd, a part of Jindal Steel and Power Ltd (JSPL), today said it plans to raise Rs 7,200 crore from its initial public offer (IPO).

The company, which is controlled by the $12-billion (nearly Rs 60,000-crore) OP Jindal Group, filed a draft red herring prospectus with the Securities and Exchange Board of India, a press release said.

It intends to utilise the net proceeds of the issue to part finance the construction and development of various thermal power projects and partly for general corporate purposes.

Jindal Power, which already has a 1,000-Megawatt (Mw) pit head merchant power plant at Raigarh in Chhattisgarh, is constructing a 2,400-Mw power plant near the existing project at a cost of Rs 12,000 crore. The project is expected to be commissioned in 2012-13.

Further, the company has Memoranda of Understanding with the government of Jharkhand for a 2,640-Mw power plant at an investment of Rs 13,000 crore and with the government of Arunachal Pradesh to develop 4,000 Mw of hydel projects at Etalin and 500 Mw at Attunli, through a joint venture with Hydro Power Development Corporation of Arunachal Pradesh Ltd.

In the past few months, power generation companies like Adani Power (Rs 3,000 crore), hydropower public sector company NHPC (Rs 1,670 crore), JSW Energy (Rs 2,700 crore) and India Bulls Power (Rs 1,800 crore) have raised money from the capital markets to fund their projects. Reliance Power had raised Rs 11,700 crore through an IPO in January 2008 — the biggest so far.

India faces an electricity deficit of 20,000 Mw during peak hours and there are plans are to add close to 1,78,000 Mw by 2017. Projects under implementation include 65,000 Mw of power, all slated for commissioning in the current Five Year Plan period ending 2012.

JPL had placed orders for boiler, turbines and generators (BTG) worth Rs 5,040 crore with Bharat Heavy Electricals Ltd (BHEL) in December 2008 for the new 4x600 Mw Raigarh project. The company has acquired land for the main plant and water approvals are in place.

Development Consultant Pvt Ltd (DCPL) is the technical consultant for the project and SBI Capital Markets is the advisor and syndicator for funds. Equity shares of the company are proposed to be listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE).

JM Financial Consultants, Enam Securities and Goldman Sachs (India) Securities are among the Book Running Lead Managers to the issue. Earlier this month, the board of JSPL had decided to go for Jindal Power’s IPO for raising up to Rs 10,000 crore.