PE-backed India Energy Exchange receives SEBI nod for IPO

Private equity-backed Indian Energy Exchange Ltd, the country’s first exchange for trading of electricity and renewable energy certificates, has received Securities and Exchange Board of India’s approval to float its initial public offering.

In June, the New Delhi-based company had filed its draft red herring prospectus, which said that the IPO will comprise sale of a 20.83% stake held by existing shareholders.

Citing a person aware of the development, VCCircle had earlier reported that the total issue size will be at Rs 600-650 crore ($93-100 million).

The Renuka Ramnath-led Multiples Alternate Asset Management – the private equity arm of Kumar Mangalam Birla-led Aditya Birla Group – and Madison India Capital, will partially exit their investments.

According to the draft prospectus, Multiples had proposed to sell a 9.37% stake in the company, or 2.72 million shares out of the 3.87 million shares it currently holds, while Tata Power Company Ltd will completely exit its 10-year investment by selling 1.25 million shares.

The public issue will also see non-banking financial companies AF Holdings LLC and Kiran Vyapar Ltd sell their shares, besides former Indian Energy Exchange managing director and CEO Jayant Narhar Deo shedding a small portion of his holdings.

The company will join a clutch of exchanges and financial market infrastructure companies that have either gone public or are planning to do so.

Multi Commodity Exchange of India Ltd had become India’s first exchange to go public, after it listed its shares over five years ago. BSE Ltd was the next to go public in February this year, while rival National Stock Exchange of India is working on its IPO.

Past exits

Indian Energy Exchange’s valuation of Rs 3,000 crore during the IPO will be better than its March valuation of Rs 2,600 crore, when PTC India Financial Services had sold a 5% stake in the company for Rs 132.54 crore.

In December 2016, Anil Ambani-controlled Reliance Infrastructure had sold its entire stake to an undisclosed buyer to earn multi-fold returns. Reliance Infra had sold a 4.122% stake for Rs 103 crore, nine years after investing Rs 1.25 crore in the energy exchange. The deal valued the company at Rs 2,500 crore.

In 2015, global multi-stage investment firm Bessemer Venture Partners had partially exited the company by selling its 4% stake to TVS Capital for Rs 80-90 crore. Subsequently, in May 2016, it had completely exited the company through the sale of its remaining 6% stake to Dalmia Group for Rs 130-150 crore, according to VCCircle estimates.

In March 2016, Jindal Steel & Power Ltd had sold a 4.12% stake in the energy exchange to Motilal Oswal PE.

For more details on the proposed IPO of India Energy Exchange, click here.

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