Jindal Power plans Rs 4,000-crore IPO

To fund its 2,400-Mw project in Raigarh

The Naveen Jindal-led Jindal Power Ltd (JPL), part of Jindal Steel and Power Ltd (JSPL), plans to raise about Rs 4,000 crore from the primary market to partly fund its 2,400 Mw superthermal power project in Chhattisgarh, two sources said.

The company already has a 1,000-Mw pithead merchant power plant in Chhattisgarh. It will invest Rs 13,400 crore for the new project coming up at Raigarh.

It is talking with a slew of banks to raise Rs 10,000 crore as debt for the project, said Sushil Maroo, joint managing director, JPL. “The fund raising will be completed shortly,” he told Business Standard. The project will be completed in 2012-13 and the investment will be at a 75:25 debt:equity ratio, he said.

When asked about the initial public offer (IPO), Maroo said the board would soon take a decision on it. A senior industry analyst in Mumbai said the Jindals are planning to develop power as a major business vertical in future, similar to its successful steel business. “They intend to use part of the power from the plant for captive consumption as well,” he said.

Power companies such as JSW Energy, IndiaBulls Power and Sterlite Energy are expected to approach the capital markets soon to raise funds for their projects. Recently, Adani Power, hydropower public sector company NHPC and Oil India had debuted in the stock exchanges. India is planning to add around 2,00,000 Mw of power generation capacity in the current and next five-year plan periods.

Sources said JPL placed orders for the boiler, turbines and generators (BTG) worth Rs 5,040 crore with Bharat Heavy Electricals Ltd (BHEL) in December 2008 for the new 4x600 Mw project. The company has acquired land for the main plant and water approvals have been received. Development Consultant Pvt Ltd (DCPL) is technical consultant for the project and SBI Capital Markets is the advisor and syndicator for funds, said sources.

The company also has a memorandum of understanding (MoU) with the government of Jharkhand for a 2,640 Mw power plant at an investment of Rs 11,880 crore.

Besides, it is in pursuit of several hydro projects in Nepal, Himachal Pradesh and Arunachal Pradesh, and some foreign locations. It is also trying to get into the non-conventional energy projects such as solar energy.