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Reliance Power limbers up for IPO

Mumbai, Sept. 30: Anil Ambani outfit Reliance Power will make an initial public offering (IPO).

The decision was taken today at a board meeting of Reliance Energy, the parent of Reliance Power.

A draft red-herring prospectus for the float will be filed with the Securities and Exchange Board of India.

Subject to approvals, the issue will provide funds for the development of power projects, Reliance Energy said in a press statement.

The size of the offering is expected to be between Rs 8,000 crore and Rs 11,000 crore. Kotak Mahindra Capital, Enam Financial Consultants, JM Financial are likely to be the managers of the IPO.

Unconfirmed reports state that around 15 per cent of Reliance Power may be offloaded in the IPO.

The company is implementing Reliance Energy’s Sasan and Rosa power projects in Madhya Pradesh and Uttar Pradesh, respectively.

It is not clear whether Reliance Power will take up all the projects of Reliance Energy.

Reliance Energy is also setting up a 7,480MW gas-based project at Dhirubhai Ambani Energy City at Dadri in Uttar Pradesh. The Rosa and the Dadri projects involve an investment of about Rs 25,000 crore.

Also in the pipeline is a 4,000MW power plant at Shahpur in Maharashtra.

Anil Ambani has been considering many options to unlock shareholders’ value in Reliance Energy.

One is the formation of a separate company for power generation.

There are also reports of Ambani hiving off the engineering, procurement and construction business of Reliance Energy. This business contributes around 32 per cent to Reliance Energy’s revenues.

Ambani had earlier told shareholders that the company would bid for two more mega power projects.

These are at Krishnapatnam in Andhra Pradesh, to run on imported coal, and a pithead-based project at Tilaiya in Jharkhand. The group has qualified for the final round of the Krishnapatnam selection process and has submitted a request for the Tilaiya project.

On Friday, the Reliance Energy stock jumped to a 52-week high of Rs 1,220 on the Bombay Stock Exchange. It closed at Rs, 1,205.50, an increase of 7.9 per cent.

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