Bajaj Group plans ₹ 3,000 crore IPO of power generation business

Posted on by KNBT

Bajaj Group’s power business comprises Bajaj Energy and Lalitpur Power Generation. Photo: Mint

Bajaj Group’s power business comprises Bajaj Energy and Lalitpur Power Generation. Photo: Mint

Mumbai: Bajaj Group plans to raise about ₹ 3,000 crore through an initial public offering (IPO) of its power generation business, said two people aware of the plans. The company is expected to soon file a draft prospectus with capital markets regulator Securities and Exchange Board of India (Sebi) for a share sale, the people said. “They have been working on the IPO of the power business over the past few months,” said one of the two people, requesting anonymity as he is not authorized to speak to reporters.

Bajaj has hired investment banks UBS, Edelweiss Financial Advisors Ltd and IIFL Holdings Ltd as advisers for the proposed IPO, the person added.

The power business has stable operating assets, with more than ₹ 2,000 crore of earnings, before interest, taxes, depreciation and amortization, the person said.

Bajaj Group, led by Kushagra Bajaj, comprises flagship company Bajaj Hindusthan Sugar Ltd, one of the largest sugar producers in the country and Bajaj Corp. Ltd, an FMCG (fast-moving consumer goods) company with focus on haircare and skincare products.

The group also has presence in infrastructure, real estate and coal mining.

Emails sent on Friday to Bajaj Group, Edelweiss and IIFL did not elicit a response.

UBS declined to comment to queries from Mint.

The group’s power business comprises Bajaj Energy Ltd, which has five thermal assets of 90 megawatts (MW) each, totalling 450MW in Uttar Pradesh. It also includes Lalitpur Power Generation Co. Ltd, which comprises three thermal units of 660MW each, totalling 1,980MW, also in Uttar Pradesh.

According to data from the group’s website, Bajaj’s energy assets have been built at a total cost of $447 million, while the Lalitpur unit cost $2.88 billion.

Several power firms have queued for an IPO this year, though largely from the renewable energy space.

Sembcorp Energy India Ltd, the Indian arm of Singapore-based utility group Sembcorp Industries Ltd, filed in February a draft prospectus for an IPO.

As of 31 December, Sembcorp Energy India had a total power generation capacity of about 4.07 gigawatts (GW) across thermal and renewable energy.

In May, India’s largest renewable energy producer ReNew Power Ltd filed a draft prospectus to sell shares worth around ₹ 7,000-8,000 crore in an IPO.

Another renewable energy company, ACME Solar Holdings Ltd, has also file a draft prospectus.

As of the date of the draft prospectus, Renew Power’s portfolio of assets stood at 5.85GW, comprising 3.92GW of operational capacity and 1.66GW of capacity under development. ACME Solar, had a portfolio of operational and under-construction projects with a capacity of 1,814 MW. So far this year, 20 firms have raised ₹27,377 crore via IPO, according to data from primary market tracker Prime Database.

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