Reliance Power may embark upon the biggest-ever private placement or follow on private placement of over Rs 10, 000 crore after the successful completion of the largest initial public offer (IPO) of Rs 11,700 crore. Investment banking sources said that once the post-listing cooling off period gets over, the company could raise fresh funds through a private placement to qualified institutional investors.
However, Anil D Ambani, chairman of the Reliance Power, refused to disclose the company's plans. He said the proceeds from the IPO and proportionate debts that the company raises would give them enough elbow room to meet the fund requirement in short to medium term.
Addressing a press conference on the occasion of the Rs 11,700-crore IPO of Reliance Power, Ambani said that the company has not yet decided on the future course of raising fresh funds. "Reliance Power is implementing various projects under the special purpose vehicles (SPVs) mode and we would achieve the financial closure of each of these projects," he added.
Ambani, however, said that Reliance Power has not done any pre-IPO placement despite several requests from fund managers. "Given a chance I would have preferred to make the entire issue for retail investors. But under the guidelines, you cannot give more than 30 per cent of the issue to retail investors," he added. The holding of promoters, including Reliance Energy, in the company is close to 89.91 per cent, which gives it ample room for raising fresh resources in case the situation demands, said a banker.
Reliance Energy, which has decided not to venture into the power generation business since all the new projects are being developed by Reliance Power, is expected to form a joint venture for manufacturing power equipment like boilers and turbines. The company (Reliance Energy) is in also advance dialogues with a couple of global power equipment manufacturers and is expected to close a deal shortly, sources said. Without disclosing the details of the proposed joint venture, Ambani said that, "We are in dialogue with 2-3 of the world's major equipment manufacturers for a cooperation agreement... This could be in the form of a joint venture or sourcing of equipment like turbines and boilers."