By 17 November, 2009

Jaiprakash Associates has set the ball rolling for another big budget public issue. It is looking to sell 5% stake in its subsidiary Jaypee Infratech that owns large tracts of real estate besides operations of Yamuna Expressway which will open next year bringing toll revenues to the firm.

Although Jaiprakash Associates has not disclosed the route through which it will sell these shares, this is being seen as a pre-IPO placement for Jaypee Infratech. The diversified company, owned by Gaurs, has been reportedly looking to raise Rs 1,500 crore through an IPO in the next few months and this could peg the company’s valuation at around Rs 15,000 crore.

Given this valuation, the expected value of the pre-IPO deal could be in the region of Rs 750 crore ($160 million). Jaiprakash Associates is estimated to have invested over Rs 1,200 crore in this subsidiary and the public issue will unlock some value of this investment. 

The IPO, it seems, will be timed with the opening of Yamuna Expressway (formerly Taj Expressway) which will reduce the travel time between Delhi and Agra. 

Jaiprakash Associates, which commands a market cap is around Rs 32,000 crore ($6.8 billion), is also raising Rs 500 crore through private placement of unsecured rated commercial papers. This means, in total, the company would soon be raising over Rs 1,200 crore.

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