State Bank of India (SBI) and ICICI Bank have together picked up 3% stake in Jaiprakash Power Ventures (JPVL), a wholly-owned subsidiary of Jaiprakash Associates (JAL), for Rs 400 crore in the first of the two private placements before its initial public offer (IPO). This would be followed by a pre-IPO placement before the firm hits the market with a public offer, together raising Rs 3,500 crore.
Besides the 3% stake, the company would dilute 17% more through another private placement and the IPO, according to a person close to the development. Of this, the pre-IPO deal is expected to be for about 3-4% of the equity, while the rest would be through the public offer.
SBI and ICICI are supposed to have paid a little over Rs 230 per share. JPVL now has a paid up capital base of Rs 541 crore, which includes 3% stake of the two banks.
JPVL is looking at a valuation of $5.5 billion post-IPO. Following IPO, the shareholding of Jaypee group in JPVL would come down to 80%.
JAL executive chairman Manoj Gaur didn't comment on JPVL's fund raising plans. "We have completed hydropower projects in challenging situations from Jammu & Kashmir to Bhutan. Jaypee group has contributed in setting up 7,880 mw hydropower projects in total," said Mr. Gaur.
Delhi-based Jaypee group, which has interests in cement, construction, infrastructure, real estate and power, has positioned JPVL as its primary vehicle for power projects including thermal, hydro and transmission. The group has another subsidiary JP Hydropower, a listed firm, which operates 300 mw Baspa-II project and is also executing a power transmission project.
JPVL, at present, operates 400 mw Vishnuprayag project and is expected to have a power generation capacity of 5,500 mw by 2015. It is executing 1,000 mw Karcham Wangtoo hydropower project, 2,525 mw hydro project in Arunachal Pradesh (2,025 mw Lower Siang and 500 mw Hirong) and 1,000 mw thermal power project in Sidhi, Madhya Pradesh. It was recently awarded 750 mw hydropower projects in Meghalaya.
In the 18 months since its 400 mw Vishnuprayag project got partially commissioned in June 2006, JPVL has paid 19% dividend in the past 18 months. It reported a revenue for the period ending March 2007 at Rs 216 crore and PAT of Rs 72 crore. The company reported a revenue of Rs 233 crore and PAT of 123 crore for the first half of the current year.
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