In the largest international listing by any Indian firm, the Ruias-managed Essar Energy Ltd on Thursday announced plans to raise $2.5 billion (Rs 11,250 crore) through an initial public offering on the London Stock Exchange (LSE) to institutional investors.
Essar Energy, the holding company for the Group’s energy businesses, plans to offer 20-25 per cent of the enlarged share capital to institutional investors in UK, Essar Group CEO and Essar Energy Vice Chairman Prashant Ruia told reporters from London.
The company holds 100 per cent stake in Essar Power and 88.4 per cent in the Bombay Stock Exchange-listed Essar Oil.
“We believe LSE will give access to the global capital market,” Ruia said. The shares will be listed by early- to mid-May.
Almost 90 per cent of the proceeds, Ruia said, will be used to fund the oil and gas projects in India. This includes expansion of its refinery from the present 14 million tonnes per annum (tpa), first to 18 million tpa and eventually to 36 million tpa.
Two-thirds of the proceeds will fund the $15 billion (Rs 67,500 crore) group’s power capacity to 11,000 mw from 1,220 mw today.
“The last 18 months have been very exciting for me,” Ruia told Hindustan Times. “But this followed a difficult patch in late 1990s, a great learning period.”
Essar Energy intends to apply for its shares to be admitted to the official list of the Financial Services Authority in the UK and for trading on LSE for listed securities.
On completion of the offer, it is expected that Essar Energy will be considered for inclusion in the FTSE 100 Index, a company press release stated.
Ruia’s uncle, Ravi Ruia, who recently bought a house at the Park Street in London, will be the company’s chairman, while Essar Oil Managing Director Naresh Nayyar will be its CEO.