Joining the list of power-generation firms looking to tap capital markets, Nagpur-based Abhijeet Power Ltd has filed its draft red herring prospectus (DRHP) with market regulator SEBI to raise Rs 1,375 crore through an initial public offering. The company, which is developing power projects with a capacity of 2,671.6 MW, is also looking at a pre-IPO placement of Rs 500 crore. The firm has earlier said that it will look at private equity firms to raise funding after filing the DRHP.
Abhijeet Power has appointed DSP Merrill Lynch, Axis Bank, Enam Securities, IDFC Capital, UBS Securities and SBI Capital Markets as the issue managers.
The company is developing three power projects in Maharashtra, Jharkhand and Bihar. These include: Chandwa Power Project (Jharkhand), a 1,080 MW coal-fired plant being developed by its 49 per cent JV Corporate Power Ltd; Banka Power Project, a 1,320 MW coal-fired plant being developed by Jas Infrastructure and Power Ltd where Abhijeet holds 94 per cent stake and a 271.6 MW plant in Nagpur.
Abhijeet Power plans to use Rs 847 crore from the issue as equity contribution for the Banka project while Rs 402 crore will be used for Chandwa Power Project. The remaining funds will be used for general corporate purposes.
The company, a part of the Abhijeet Group, reported a total income of Rs 35.7 crore for the nine-month period ending December, 2010, and profit before tax of Rs 2.94 crore.
Abhijeet Group has interests in power, mining, roads, steel and ferroalloys space. JAS Toll Road, a 32.5 km toll road on NH-4 in Karnataka operated by the group on a BOT basis, has raised funding from IDFC Project Equity.
Several power companies like Ind-Barath, Sterlite Energy, Avantha Power and Jindal Power have filed for IPO over the last two years. Recent reports suggest that Jindal and Sterlite have let their approvals lapse, as previous issues have not done very well.
Firms like Adani Power and Indiabulls Power, which were listed in 2009, have also not performed according to markets expectations. Indiabulls Power, which was listed with a price of Rs 45, closed today at nearly 60 per cent discount, at Rs 18.5 per share. Adani Power closed today at over 9 per cent premium, nearly two year after its issue.
2010 in India saw power utility firms dominate the private equity deal-making space, with 20 per cent of the overall PE deal flow or deals worth $1.72 billion in the sector, according VCCedge, the financial research arm of VCCircle.