Orient Green Power Company Ltd (OGPL), an associate company of Shriram EPC Ltd (SEPC), has filed a draft red herring prospectus (DRHP) with SEBI for its proposed initial public offer (IPO). OGPL is engaged in power generation from renewable sources and has a portfolio of operating projects of 193.1 Mw. The company aims to expand its portfolio to 1,000 Mw in three years for which it is seeking funds.
Business Standard had in January reported that OGPL was planning to go in for an IPO by the second quarter of 2010. The company is planning to raise around Rs 800 crore to support its Rs 4,000 crore investment plan. OGP would become the first renewable energy company which will go public.
According to sources close to the development, presently, the OGP, promoted by Shriram EPC, a part of the $5.5-billion Chennai-based diversified Shriram group, presently has 200 mega watt (Mw), which will be increased to 1,000 Mw by 2012-13, for an investment of around Rs 4,000 crore.
“To support the investment, the company would require around Rs 1,200 crore of equity,” he added. The company is looking to dilute up to 20 per cent stake in OGP, added sources.
Bankers to the issue are JM Financial, Goldman Sachs, UBS Securities and Axis Bank Ltd.
SPEC holds 35.8 per cent in OGPL, the rest of the stake is held by two private equity investors including Bessmer Venture Partners (BVP) and Olympus Capital.
Of the 1,000 Mw planned, 600 Mw will be from wind, including 150 Mw from Eastern Europe and the rest will be from bio-mass and others. The company joined hands with Dutch firm Leitwind BV to develop the projects across Eastern Europe, including Bulgaria, Croatia and the Czech Republic, and Italy.
Orient Green Power is presently in the process of building and operating clean energy power plants like wind, hydro and biomass.
The company, as on December 31, 2009, had an installed capacity of 40.5 Mw of biomass power projects in operation, and had estimated installed capacity of 74 Mw of biomass power plants under construction and an aggregate installed capacity of 187 Mw under advanced development.
The company uses biomass fuels like agri-residues and waste from agriculture crops, forestry and related industries such as rice, mustard, Soya bean husk, straw, cotton stalks, maize stalks, ground nut shells, wood chips, bagasse, coconut shells and fonts for biomass plants.
On the wind, as on December, OGPL had 134 Mw of projects in operation in India. The next phase of growth will come from greenfield developments in Tamil Nadu and Karnataka with an aggregate capacity of 300 Mw, according to the information available in the company’s website.
The other focus area for the company is in small hydropower. To start with the company is implementing a small hydel plant with 15 Mw capacity at Orissa through a joint venture with the company - Pallavi Power and Mines Ltd. The site for the project has been identified and land acquisition is in progress.
OGPL has identified generation of power from biogas as another growth area and also in the process of setting up co-generation plants with sugar mills to produce captive power, as part of its strategic expansion plans for biomass power business.
Orient Green Power was formed as a joint venture between Shriram EPC and Bessemer Venture Partners in 2006, with both firms pooling in $20 million in equity capital. It was followed by another round of $55 million in private equity funding led by Olympus Capital which invested from its $250 million Asia Environmental Partners. Bessemer is also a shareholder in Shriram EPC along with other PE players like UTI Ventures.
