Preferential BSES allotment at Rs 640

Reliance group power company BSES will make a preferential allotment of equity and equity-related securities at around Rs 640 per share - a large chunk of which will be allotted to the promoters.

This will enable the Reliance group to hike its stake in BSES to around 58 per cent. The Reliance group's stake in BSES had declined to around 51 per cent after the conversion of some outstanding foreign currency convertible bonds.

The company said in a notice issued to the Bombay Stock Exchange (BSE) that it has convened a meeting of the board on February 22, 2004, "to consider inter-alia a proposal to issue equity/equity-related securities on a preferential basis subject to necessary approvals as may be required in this regard". It is learnt that although the promoters will be the major subscribers to the issue, there will be other subscribers too.

"After the allotment, the stake of the promoters "" the Reliance group "" will go up to around 58 per cent. The group's stake fell to between 50 and 51 per cent after the FCCB conversion a few months ago," sources in the know said.

The proceeds of the issue will also be used to part finance the 3,500 Mw gas-based plant that BSES has announced it will set up in Uttar Pradesh, apart from funding normal capital expenditure.

BSES is India's leading private sector utility group, with an aggregate estimated revenue of Rs 6,400 crore, and total assets of Rs 7,650 crore.

The group distributes nearly 16,000 million units of power to over 5 million customers in Mumbai, Delhi, Orissa and Goa, across an area covering 1,24,300 sq. kms.

BSES generates 933 MW of power through its thermal power plants located in Maharashtra, Andhra Pradesh, Kerala and Goa. BSES is ranked amongst India's top 25 listed private companies in terms of all major financial parameters, including assets, sales, profits and market capitalisation.