Jaypee Infratech May Raise Rs 1,650Cr Via Public Float
Advertisement

Jaypee Infratech May Raise Rs 1,650Cr Via Public Float

By Pallavi S

  • 03 Dec 2009

Jaypee Infratech is looking to raise Rs 1,650 crore through its public float that could possibly value the two-year-old company as high as Rs 17,000 crore, almost half of its parent Jaiprakash Associates (JAL). The company has as many as nine book running lead managers to the issue: Morgan Stanley, Bank of America Merrill Lynch, Axis Bank, Enam, ICICI Secrutities, IDFC SSKI, JM Financial, Kotak and SBI Caps. The company has filed its draft red herring prospectus with the market regulator.

JAL is encashing more than 50% of the entire capital it spent on the subsidiary through a partial share sale as a part of the issue. It is selling around 60 million shares which could net around Rs 750 crore against its investments of around Rs 1,200 crore.

Although details of pricing of the issue has not been disclosed, given that JP group management has indicated that it has been looking to dilute stake by 15%, it would mean that the issue price could be around Rs 125. The fresh issue of around 130 million shares would fetch the company Rs 1,650 crore.

Advertisement

Incidentally, JP Infra is also looking to strike a pre-IPO deal which could set the price line for the issue. This could be in the region of 5% of the post issue capital or around Rs 850 crore.

Jaypee Infratech owns large tracts of real estate besides operations of Yamuna Expressway which will open next year bringing toll revenues to the firm. The IPO is likely to be timed with the opening of Yamuna Expressway (formerly Taj Expressway) which will reduce the travel time between Delhi and Agra.

At this price, Bennet, Coleman Company Ltd, which was allotted 1 million shares at a price of Rs 250 per share (translating into a deal of Rs 25 crore), could be sitting on a 50% haircut on its year-old investment in JP Infra.  Incidentally, the agreement with BCCL stated that the company would not issue shares at a price less than Rs 250 other than that to the employee trust and JAL. It is not clear how, if at all, BCCL will be compensated for the lower issue price.

Advertisement

 

Share article on

Advertisement
Advertisement
Google News Icon

Google News

Follow VCCircle on Google News for the latest updates on Business and Startup News