Reliance Power to float Rs 14,000cr IPOBS Reporter / Mumbai September 30, 2007Anil Ambani-promoted Reliance Energy (REL) today announced that its wholly-owned subsidiary Reliance Power will go public soon. The company will file a draft red herring prospectus with the Securities and Exchange Board of India shortly.Reliance Power is expected to mop up $3.5 billion (Rs 14,000 crore) from the market, which will be the biggest public float in recent times after the issues by DLF and ICICI.The company plans to add 25,000MW capacity through new projects and expansion of capacity over the next couple of years. Much of the funds raised will be used for this purpose.Going by the market value of Rs 4 crore per MW of energy, the company is valued at Rs 100,000 crore, according to investment bankers.On the basis of this valuation, Reliance Energy will offload nearly 8% stake through the proposed IPO.The company is in talks with investment banks such as Kotak Mahindra Capital, JM Financial, J P Morgan, HSBC and Enam among several others. The company will appoint a separate banker to sell the issue overseas.A major portion of the funds raised will go into the 4,000MW Sasan coal-based power project which the company bagged recently. The plant, which is expected to be completed in five years, will supply power to Madhya Pradesh, Uttar Pradesh, Delhi, Rajasthan, Haryana, Punjab and Uttarakhand.REL had floated a special purpose vehicle, Sasan Power, to execute the project. The SPV was later merged with Reliance Power, a five-year-old company which has executed about 268MW.Explaining the higher investment in Sasan, a company executive said,
