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Another huge Indian IPO is in the works. If media reports are to be believed, Reliance Power, a subsidiary of Anil Ambani group company Reliance Energy (REL), is planning a Rs 11,000 crore - Rs 14,000 crore ($2.75-3.5 billion) IPO to fund its ultra mega power projects in Sasan and Rosa. Mint reports that the group is planning to shed about 30 per cent stake, and it quotes an unnamed investment banker as saying that the company may be valued at $11 billion. Reliance Power may file the IPO papers with market regulator SEBI next week. If the IPO goes through, this will be the largest IPO in Indian market, surpassing DLF's $2.25 billion initial public sale a few months ago.
The Economic Times reports that Reliance may need about Rs 21,000 crore for its Sasan and Rosa projects in UP, for covering the cost for engineering, procurement and construction (EPC) equipment purchase and technology hiring.
So who will manage the issue? According to ET, Kotak Mahindra Capital and JM Financial could be in the reckoning to be the lead managers. And it's likely more merchant banks will get involved in the mega IPO.
Reliance Power also reportedly plans to participate in the upcoming bids for the ultra mega power projects in Krishnapatnam in AP and Tilaiya in Jharkhand. It may also be likely that Reliance Power will rope in a foreign strategic partner to the company.