Reliance Power IPO to raise Rs 11,000 cr
Anil Ambani-led Reliance Power is set to hit the capital market in the third week of Jan to mop up between Rs 11,000 to Rs 12,000 crore, reports Arun Kumar.business Updated: Dec 30, 2007 21:10 IST
* Issue could raise Anil Ambani’s wealth by $11 billion and take him to the top of India’s rich list
* Issue tops DLF’s big offer last year and possibly, ONGC’s stake hive-off in 2003
* Overall company value of Reliance Power would top Rs 96,000 crore
After the Securities and Exchange Board of India (SEBI) cleared the decks last week, Anil Ambani-led Reliance Power is set to hit the capital market in the third week of January to mop up between Rs 11,000 to Rs 12,000 crore – marking one of the country’s biggest share offerings.
As a result, Anil could overtake brother Mukesh as India’s wealthiest Indian based on the market value of the holdings he controls.
According to invesment banking sources, the company is expected to price the issue at Rs 410 to Rs 450 per share. At this price, the company would be valued between Rs 96,000 and Rs 100,000 crore.
Based on the issue price, Anil Ambani’s wealth could spurt to $54 billion, and his 44 per cent holding in Reliance Power alone would be valued at more than $11 billion.
Under its original draft prospectus, the company had planned to issue 130 crore equity shares of Rs 2 each at a price of around Rs. 90 per share. However, under the prevailing guidelines, the offer price of share with a face value of less than Rs 10 need to be at Rs 500 or above. As a result, the company changed the face value to Rs 10.
The company now plans to issue 26 crore equity shares, and the issue size would make it the biggest IPO after reality giant DLF’s IPO of Rs 9,250 crore last year. In case the issue is priced at Rs 450 per share, the company will mop up Rs 11,700 crore, which would be more than the Rs 10,500 crore offer for sale of Oil and Natural Gas Corporation in which government divested a part of its holding in March 2003.
Company officials refused to comment on the issue.
After the IPO, the company’s paid-up capital will increase to Rs 2,260 crore. The public float of 26 crore equity shares would constitute 11.5 per cent of the expanded equity base.
The company is building capacity aggregating to 12,000 megawatts (MW) over the next five years, said an independent investment analyst who did not want to be identified “Given the growth in the power sector, the company is expected to be a major player in the power sector among the private sector players,” he said.
The company has got two ultra mega power projects – Sasan and Krishnapatnam, involving 4,000 MW each. The capital outlay on each of these two projects would be worth Rs 16,000 crore.
Besides this, the company is implementing projects for 4,000 MW under five different projects.
The company has also given the mandate to three leading internal banks and financial institutions to raise syndicated loans of $6 billion. This includes $ 2 billion each from Macquarie India Advisory, ABN AMRO Bank and Deutsche Bank.