JSW Energy plans Rs 4,000 crore IPO

Likely to seek Sebi approval this month, to complete sale end-March 2008, say sources.

JSW Energy Ltd plans to raise as much as $1 billion (about Rs 4,000 crore) to build generators, driving a record year for initial share sales by Indian power producers, two people familiar with the offer said.

The company, based in Mumbai, will seek regulatory approval this month and complete the sale by the end of March, the people said, requesting anonymity before an announcement.

Arun Bhatt, a company spokesman, declined to comment.

Prime Minister Manmohan Singh wants to double investment in power over the five years to 2012 because shortages cause blackouts in most of India, curbing economic growth. 
 

POWER FUNDING Other companies raising money to fund project plans
Reliance Energy	Sterlite Industries
Rs 12,000 cr	Rs 8,000 cr

Singh's spending plan may lure investors to JSW Energy and Reliance Power Ltd, controlled by billionaire Anil Ambani's Reliance Energy Ltd, which is planning its own share sale.

"There is excitement surrounding this sector and these issues will attract a lot of investors," said Sandip Sabharwal, chief investment officer at J M Financial Mutual Fund in Mumbai, which oversees the equivalent of $2.86 billion in assets.

JSW Energy is setting up a 1,000 mw lignite-based power plant in Barmer, Rajasthan, and a 1,200 mw coal-based plant in Maharashtra. The company also plans to set up generators in West Bengal, Jharkhand and Andhra Pradesh.

JM Financial Consultants Pvt and Kotak Mahindra Capital Co are among banks that will arrange the sale, the people said.

JSW, part of the $8 billion O P Jindal group, has interests in mining, steel, power and oxygen.

Huge funds
JSW Energy's offer will raise planned fund raisings by power producers in India to $6 billion, according to people familiar with the plans.

Reliance Power may raise as much as $3 billion in the country's biggest initial public offering and Sterlite Industries (India) Ltd intends to sell a stake worth as much as $2 billion in its energy unit to build power plants.

Indian companies in all sectors raised a record $8.5 billion (about Rs 34,000 crore) in IPOs last year, as the biggest rise in India's Sensitive Index in four years spurred companies to raise funds, according to data compiled by Bloomberg.

Big expansion
Power Grid Corp, the country's main transmission company, sold shares last year to fund a more than doubling of the nation's network to 125,000 km, long enough to circle the earth three times. The stock has almost tripled since the initial sale.

Sterlite sold $1.75 billion (about Rs 7,000 crore) of stock in the US in June to fund a 2,400 mw power plant in Orissa, where the group is building a 500,000 tonne aluminum smelter to meet rising global demand for metals. The stock rose 90 per cent in 2007, its third annual gain.

Shares surge
Reliance Energy quadrupled in value last year, making it the best-performing stock on benchmark index, as the government plans to invest $200 billion in electricity generation and distribution in seven years to sustain record economic growth.

The government has set a target to add 78,577 mw generation capacity in the five-year development plan ending March 2012, from 132,330 mw at the end of March 2007, according to the Central Electricity Authority.

Transmission capacity is targeted to expand to 37,700 mw in the five years from 14,100 mw now, it said.

The finance ministry estimates a power shortage is responsible for cutting gross domestic production by a tenth.