Anil Ambani-led Reliance Energy Ltd on Sunday said its subsidiary Reliance Power would go for its maiden public issue soon. The initial public offering is expected to be the biggest in India.
"The Reliance Energy board met today and approved an initial public offering for its subsidiary Reliance Power," a senior official of the Anil Dhirubhai Ambani group said, adding the draft prospectus will now be filed with the markets watchdog.
This will be the first time a company in the Anil Ambani group will access the capital market since the split in the empire with elder brother Mukesh two years ago. The actual size of the issue has not been decided.
The company is valued at around $11 billion and may offload around 15-35 per cent shares in the initial public offer, sources added. This will make the issue larger than those of DLF and ICICI Bank.
Ahead of Sunday's board meeting, presided over by Anil Ambani, Reliance Energy informed the Bombay Stock Exchange it will "consider every opportunity for growth and unlocking of shareholders' value".
After speaking to a host of investment bankers, the group is believed to have zeroed in on Kotak Mahindra Capital and JM Financial to give them the mandate for the public offering.
Reliance Energy had won the 4,000 MW Sasan ultra mega power project in Madhya Pradesh and intends to set up several similar projects in five years for which it needs more than Rs 600 billion ($15 billion), company sources said.
The Sasan project, estimated to cost Rs 200 billion ($5 billion), was transferred to Reliance Power in August. Ambani had remarked that his group would invest Rs 600 billion in creating new energy generation capacities over the next few years.
Reports of a possible public issue by its subsidiary had pushed Reliance Energy shares up by 7.9 per cent at Rs 1,205.50 on the Bombay Stock Exchange (BSE). The share was top gainer among the 30 Sensex shares.
The company has aggregate estimated revenues of Rs.95 billion ($2.1 billion) and total assets of Rs.107 billion ($2.4 billion).