Jaiprakash Power Venture, a Jaypee group company, is set to enter the capital market to mop up over Rs 4,000 crore in the next three months.
According to highly placed sources, Jaiprakash Power Venture will raise the money to fund ongoing projects entailing capital investment of Rs 20,000 crore. The company will issue 20 per cent fresh stock, resulting in a market capitalisation of around Rs 20,000 crore.
A company executive refused to comment on the issue. “We are exploring various options and have not yet formalised plans,” he said.
Sources, however, said the company had appointed investment bankers Deutsche Investment Bank and SSKI as advisers for the issue, which would be completed in three months.
The Jaypee group is planning to amalgamate all its power affiliates with Jaiprakash Power Venture. The company is setting up five power plants involving a capacity of 4,400 MW. The new projects include the 1,000 MW Karcham project in Himachal Pradesh and the 1,600 MW Lower Siang and the 500 MW Hirong projects in Arunachal Pradesh. It is also setting up two thermal power plants with capacity to generate 1,500 MW. All these plants will be commissioned by 2011.
The company will also bid for upcoming 4,000 MW power projects that are part of the government’s mega power policy. Sources said the group would eventually merge Jaiprakash Hydro Power with Jaiprakash Power Venture. Jaiprakash Hydro is listed and has a market capitalisation of Rs 4,800 crore.
After government policy turned favourable for private power production, corporates are moving swiftly to grab market share. Adani Power, which is setting up a 2,640 MW plant, has raised $227 million from 3i Group by divesting 10 per cent stake. Reliance Power is planning to raise around Rs 12,000 crore through an IPO. Sterlite Industries has hived its power business and is aiming to raise around Rs 5,000 crore from the primary market.