Jaiprakash Infratech, the wholly owned subsidiary of Jaiprakash Associates is set to raise around Rs 1000 crore through private placement to ICICI Venture. The realty venture of Jaiprakash Associates that owns Taj Expressways and around 3,000 acres of land along the expressway starting from Noida, is likely to be valued around Rs 25,000 crore.
Sources said that Jaiprakash Associates is mopping up Rs 1,000 crore at Rs 250 per share, divesting about 4 per cent of the company's equity. The company current has a paid-up capital of Rs 1000 crore.
The deal is expected to be announced by the end of this week, sources said.
It may be recalled that the company had earlier held discussions with ICICI Venture to raise around Rs 3,000 crore, but there was not outcome because of differences over the board position and valuation, sources said.
Sources said that the company management was not willing to give significant stake to a single firm and rather would prefer to a handful of investors. “In the first tranche, the company would raise only Rs 1,000 crore,” they added. The fund will be used to build 160 KM concrete road from Delhi to Agra.
When contacted, Manoj Gaur, executive chairman and managing director of Jaiprakash Associates, refused to comment on the issue. “The company is in discussion with some of the funds, but nothing has been finalized,” he added.
The diversified conglomerate – Jaiprakash Associates is going to be part of the elite club – BSE Sensex from March 14, replacing Bajaj Auto. Besides having wholly owned subsidiaries in realty and power sectors, the flagship company has also embarked upon a massive expansion plan in cement to increase its capacity to 32 million tones from current level of around 7.5 million. It is also one of the leading players in construction and infrastructure sector.
Last month, it won the bid for the construction of the 1047 KM Ganga Expressways. The company’s current market capitalisation is Rs 29,119 crore, which is much less than the value of its wholly owned subsidiaries. Besides Jaiprakash Infratech, its other subsidiary– JP Power Venture is entering the primary market to mop up around Rs 4,000 crore at a value of around Rs 18,000 crore.