The Banking and Strategy Initiative

Chillin' out till it needs to be funded

India Power Infrastructure: 2009 IPO Update

As per current Ministry of Steel meetings, the NMDC stake sale is likely to be of 15% in which case it could easily be over Rs 2000 crores ($400m) at CMP of 375 ( $7.50) As also the ones for Adani Power, Godrej, Indiabulls Power..i think it can happen given that each will have $40-50 million from retail investors, but it requires disciplined Institutional Investors who believe the India story..anyway, this kind of volume has not been done ever before in the same year, but then this is the era of Infrastructure.

Foreign portfolio investors have poured in $8.7 billion since April, while speculation is already rife for PSU divestment in Coal India and National Hydro Electric Corp in the Power sector, each easily worth a $1 b for 15-20% stake. Also SBI Infrastructure fund with Macquarie has raised its bucket size to 1.5 billion adding another $500m.

A dani Power is raising $600m. NHPC is going first planning to issue more than 170 crore shares of Rs 10 par value for offer including a existing 5% stake unlikely to be issued at par(despite reports) to net 6000 crores for 15% of the company capital NHPC also plans to invest Rs 28,000 crore by 2012 to position itself as over 10,000 MW utility. At present, its generation capacity stands at 5,200 MW. The proceeds from the IPO would partly be utilised to finance the expansions. Only 2000 Cr will go to new projects while 4000 Crore will fund existing project plans

Indiabulls Power seems to have issued earlier capital at a premium and a current QIP at 25% of the Original at Par to raise a further 200 Cr ( $40m) Thus it is curently sitting on unutilised capital of 2200 crores ($440m). It has two Power plants planned in Maharashtra with the first in Nasik of 1335MW capacity (shld cost between (5500 cr to 7000 cr OR $1.1-1.4 billion) It is unlikely to try for any considerable premium if it comes first.


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