| The company, which plans to launch its initial public offering in the first week of August to raise over Rs 1,200 crore, will decide the price in due course. The shares have a face value of Rs 10 and a book value of Rs 45 per share. Currently, the earnings per share is estimated at Rs 6. Company sources said clearance from the Securities and Exchange Board of India for the public issue was expected by July 15. The company filed a draft prospectus with the capital markets watchdog last week to offer around 5 per cent of the equity to the public. |
| The company plans to offer a maximum 50 per cent of the shares on offer to qualified institutional buyers, 25 per cent to high net-worth individuals and the rest to retail investors. The sources, however, said the company was in favour of increasing the retail investors' quota. |
| The funds raised through the flotation will be used to meet expansion plans. The company needs to spend around Rs 16,000 crore to meet the capacity addition target of 9,300 mega watt (mw) during the tenth-plan period and the initial part of the eleventh-plan period. The tenth-plan target entails an investment of Rs 35,000 crore, to be funded in the ratio of 30 per cent equity and 70 per cent debt. |
| The sources said the Rs 10,500 crore capital expenditure requirement would be met through internal accruals. The company has earmarked over Rs 4,500 crore for capex during the current financial year and will subsequently step up the investments in the remaining two years of the tenth-plan period. |
| "Of the 9,300 mw target, 2,000 mw capacity had been added, while work on 8,400 mw is underway," the sources said. They added that the tender for constructing a 500 mw plant in Bhilai will be awarded by August. |
| Work at Kawas and Gandhar plants, which each having a capacity of 1,300 mw, will be partly completed by 2007. Tenders for these two projects will be finalised by the end of the year. |
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