JSW Energy fixes IPO price band at Rs 100-115/sh

JSW Energy fixes IPO price band at Rs 100-115/share

JSW Energy, a part of Sajjan Jindal-led JSW Group, has fixed the price band between Rs 100 and Rs 115 per equity share for an initial public offering (IPO) of equity shares of Rs 10 each for cash at a price to be decided through a 100% book-building process and aggregating up to Rs 2,700 crore. The issue will open for subscription on December 7, 2009 and close on December 9, 2009.

A discount of Rs 5 to the issue price determined pursuant to completion of the book building process will be offered to retail individual bidders.

The issue has been graded by CARE as CARE IPO Grade 4 indicating above average fundamentals.

It intends to utilise the issue proceeds for partially financing construction and development of the Identified Projects aggregating to 2,790 MW in capacity & 400 KV transmission project and mining venture (at cost of Rs 2,142.53 crore) and repayment of corporate debt (Rs 470 crore).

For the year ended March 31, 2009, the company has reported profit after tax of Rs 578.09 crore on total income of Rs 1,593.98 crore. For the half year ended September 2009, it has posted profit after tax of Rs 294.62 crore on total income of Rs 926.28 crore.

At least 60% of the issue will be allocated on a proportionate basis to qualified institutional buyers (QIBs), out of which 5% (excluding Anchor Investor Portion) shall be available for allocation on a proportionate basis to Mutual Funds only. The remainder shall be available for allocation on a proportionate basis to all QIBs, including Mutual Funds, subject to valid Bids being received from them at or above the Issue Price.

If at least 60% of the Issue cannot be allocated to QIBs, then the entire application money will be refunded forthwith. Further, not less than 10% of the Issue will be available for allocation on a proportionate basis to Non-Institutional Bidders and not less than 30% of the Issue will be available for allocation on a proportionate basis to Retail Individual Bidders, subject to valid Bids being received at or above the Issue Price.

Incorporated in 1994, JSW Energy is a part of the JSW Group, headed by Mr. Sajjan Jindal, which is in turn a part of the O.P. Jindal Group. JSW Energy Ltd. is an established energy company with 860 megawatts, or MW, of operational generating capacity and 2,790 MW of generating capacity in the construction or implementation phase, 135 MW of which has been commissioned. In addition, it has power generation projects at an early stage under development with a proposed combined installed capacity of 7,740 MW. It is one of the early entrants in the power trading business. Its goal and strategy is to become a leading full-service integrated power company in the Indian power sector with presence across the value chain.

The book running lead managers to the Issue are JM Financial Consultants Private Limited, Kotak Mahindra Capital Company Limited, ICICI Securities Limited, IDFC-SSKI Limited, J P Morgan India Private Limited, SBI Capital Markets Limited, Morgan Stanley India Company Private Limited and IDBI Capital Market Serviced Limited.