(From left) JSW Steel MD Sajjan Jindal with Uday Kotak, MD of Kotak Mahindra Bank, and JM Financial chairman Nimesh Kampani in Mumbai on Thursday. (PTI)

Mumbai, Dec. 3: JSW Energy is offering a discount bait to lure retail investors to subscribe to its initial public offering which opens next Monday.

The company is offering a discount of Rs 5 per share to the issue price. The IPO has been priced in the band of Rs 110 to Rs 115 per share. The issue will close on December 9.

JSW Energy is planning to raise Rs 2,700 crore through the issue which is being made to part finance its power generation projects.

JSW Energy is the fourth power producer to hit the capital market after NHPC, Adani Power and Indiabulls Power.

All these issues received full subscription from retail investors, but their appetite has waned after the stocks wilted on listing.

The retail portion in the NHPC issue was subscribed 3.6 times, but it dropped to 1.09 times in the Indiabulls Power IPO. Given such a trend, JSW Energy today said it would offer a retail discount of Rs 5 to the issue price determined after the completion of the book-building process.

The practice of companies offering a discount to retail investors in their IPOs is not rare. In the past, several IPOs like the one from Reliance Power and even follow on offerings have seen discounts being offered to retail investors.

Chief financial officer Pramod Menon today said JSW Energy would also allot anchor investors an around 18 per cent stake. He added that these anchor investors would include domestic and foreign investors.

“Anchor investors will bring in between Rs 486 crore and Rs 492 crore,” he added. JSW Energy will disclose the identity of the investors tomorrow. The company would allot at least 60 per cent to qualified institutional buyers on a proportionate basis.