Indiabulls Power to raise INR15bn through IPO

The Indian power company has already raised INR2.8bn from anchor investors and will use the proceeds from its maiden IPO to help build two power projects.

Indiabulls Power, a subsidiary of Indian conglomerate Indiabulls Group, has launched an initial public offering (IPO).

It aims to raise up to INR15 billion ($322 million; €219 million) from the issue, which will see a stake of approximately 17 percent of the company in public hands.

Indiabulls Power is offering 339.8 million shares at between INR40 and INR45 per share up until 15 October. This excludes a greenshoe option of 50.9 million shares, which allows the company to allocate extra shares in the event of over-subscription. The IPO was nearly four times oversubscribed within four hours of the offering, according to data from the NSE.

The company has already raised approximately INR2.8 billion from anchor investors including fund house Copthall Mauritius Investment and banks BNP Paribas Arbitrage, Credit Suisse Singapore and Macquarie Bank. Under a policy approved by the Securities and Exchange Board of India (SEBI) in June, companies are able to pre-allocate up to 30 percent of their IPO to institutional investors, who have to comply with a 30 day lock-in period.

The capital raised will be used to construct two coal-fired power projects in the state of Maharashtra. Set up in 2007, Indiabulls Power is developing a portfolio of five power projects across the country.

After the issue, Indiabulls Real Estate, Indiabulls Group’s real estate arm, will see its majority stake of approximately 71 percent stake in the company fall to about 59 percent. LNM India Internet Ventures and FIM, investment vehicles owned by Indian steel tsar Lakshmi Mittal and San Francisco-based investment firm Farallon Capital Management, will also see their stakes reduced to 9 percent and 15 percent respectively. 

India’s power companies have successfully raised capital from the public markets recently. Indiabulls Power joins Adani Power and NHPC, which raised a combined INR90 billion from their maiden IPOs this August. In the same month, another power producer JSW Energy filed an application with SEBI for an IPO.