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Essar energy raises $1.94 bn in London stock exchange
Amid fears of post-election political turmoil and looming budget cuts, Britain has received good news from India.
Amid fears of post-election political turmoil and looming budget cuts, Britain has received good news from India.
Essar Energy has announced it has raised $1.94 bn on the London stock exchange. It’s the biggest London flotation since the start of the global financial crisis two years ago.
Essar Energy, part of the Essar Group, sold 303 million shares at 420 pence — lower than the original 450-500 pence — amid nervous market sentiments marked by several companies pulling their flotation, including Uralchem of Russia.
“We took a call on it,” said Prashant Ruia, Chief Executive of Essar Group. “It’s better to have an attractive offering for our new shareholders and make sure the listing is successful. We wanted a good quote; no one asked about hung parliaments.”
Ruia said the flotation had attracted a number of “high- quality investors”. “To do a $1.94b deal, you need a few people to come in for size, and that’s been very heartwarming. Obviously that shows confidence, not only primary confidence in the Indian story — because at the end of the day we are piggybacking on the Indian growth story — but also confidence in the company.”
Conditional trading on the shares will start on Tuesday and the listing is planned for May 7 — a day after election The Ruia family and a senior government minister from New Delhi are expected to attend.
The London Stock Exchange is said to be “very excited”.
The size of the flotation means Essar Energy will qualify to be listed on the FTSE 100 at the next reshuffle of the blue-chip London index in June.
The company will be the first Indian-owned firm to be listed on the index since Vedanta Resources in 2006.
