Reliance Power, the Anil Ambani group firm, will raise $ 2-$ 2.5 billion in the country’s largest power sector IPO. Reliance Power, which is implementing a clutch of large power generation projects across the country, will sell 10-15% to the public and institutions in the coming months to fund various projects, the board of its parent Reliance Energy said on Sunday.
The company is planning to implement projects worth over Rs 70,000 crore. “The draft red herring prospectus (DHRP) for the public offer will be filed by Reliance Power with Sebi soon. Reliance Power is pursuing a number of projects based on gas, coal and hydro power in the country. The proposed IPO is being undertaken to fund the development of the said power projects,” REL said in a statement.
Kotak Mahindra, ICICI Securities, JM Financial and Enam Financial are the advisors to the IPO. Also playing a leading role is foreign investment banking firm UBS.
Reliance’s IPO will be one of the largest in recent times. Realty firm DLF recently raised around Rs 9,187 crore, followed by Reliance Petroleum’s Rs 8,100 crore issue. ICICI Bank, the country’s second-largest bank, raised Rs 8,898 crore in a follow-on public offering, while National Thermal Power Corporation (NTPC), the country’s largest power producer, raised Rs 5,368 crore in 2004.
Rough calculations show that Reliance Power could fetch a value of around Rs 68,000 crore if the IPO raises around $ 2.5 billion for a 15% stake. Reliance Energy, which owns 50% in the company, is valued at around Rs 27,549 crore as per Friday’s closing price of Rs 1,205. REL’s 50% stake in Reliance Power alone could be worth more than its current market-cap if the IPO happens at the above-mentioned valuation.
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