Bajaj Energy Ltd, a thermal power generation company under the Bajaj Group, has filed its draft prospectus with the Securities and Exchange Board of India (SEBI) to float an initial public offering (IPO).
The IPO is a sale of fresh shares worth Rs 5,150 crore and a sale of shares worth Rs 300 crore by promoter entity Bajaj Power Ventures Ltd.
Edelweiss Financial Services, IIFL Holdings, SBI Capital Markets and IDBI Capital are the merchant bankers arranging and managing the share sale.
Bajaj Energy is led by Kushagra Bajaj, the son of Shishir Bajaj who split from the Bajaj clan and drove his own consumer, sugar and energy businesses. Shishir Bajaj is the younger brother of Rahul Bajaj who led Bajaj Auto before his son Rajiv took over.
An IPO and subsequent listing will see Bajaj Energy join comparable peers Adani Power Ltd, Tata Power Ltd, NTPC Ltd, JSW Energy Ltd, and Torrent Power Ltd on the stock exchanges.
It has been a decade since a thermal power company last went public. Indiabulls Power and Adani Power had launched IPOs in the second half of 2009. New Delhi-based GMR Group attempted an IPO of its energy business GMR Energy in 2014 but scrapped plans within a month of filing its draft red herring prospectus.
Incorporated in 2008, Bajaj Energy, along with associate firm Lalitpur Power Generation Co. Ltd (LPGCL), is one of the largest private-sector thermal generation companies in the state of Uttar Pradesh.
The company develops, finances and operates thermal power plants in India.
Bajaj Energy has a total gross installed capacity of 2,430 megawatt (MW), comprising 450 MW from five operational plants of 90 MW each, owned and managed by Bajaj Energy, and 1,980 MW from the power plant owned and managed by LPGCL, which Bajaj Energy will acquire from the proceeds of the offer.
It has earmarked Rs 4,972 crore to acquire 69.93 million LPGCL shares, besides an undisclosed amount for general corporate purposes.
The company reported consolidated net profit of Rs 35.9 crore for nine months ended December 2018 on revenue (from operations) of Rs 694 crore.
Its full-year fiscal 2017-18 net profit was Rs 41.68 crore on revenue of Rs 855.19 crore.
The company’s net profit growth declined 26% on a compounded annual basis in the three financial years starting March 2016 from Rs 102.8 crore to Rs 41.6 crore.
Its revenue growth has fallen 13% on a compounded annual basis from 1,331.12 crore in fiscal 2016 to fiscal 2018.