Jaiprakash Power Ventures (JPVL), engaged in planning, developing and implementing power projects has filed its DRHP with SEBi on 8th January, 2008 to enter the capital market with a public issue of 10.40 crore equity shares of Rs 10 each at a price to be decided at a later stage through the 100% book building process.
The issue will constitute 16.34% of the fully diluted post issue capital of the company.
The company proposes to list its shares on BSE and NSE. The BRLMs to the issue are Enam Securities, Morgan Stanley, Deutsche Bank, JP Morgan, IDFC-SSKI, ICICI Securities, JM Financial and Kotak Mahindra.
There are three main purposes for which the funds raised from the issue have been earmarked for. The first one is to finance the equity component of the upcoming 1,000 MW Nigrie Thermal power project in Madhya Pradesh which would entail a sum of Rs 1,500 crores. Apart from this Jaiprakash associates plans to use the IPO proceeds for subscribing to the equity of two companies which would be involved in executing power projects. The first of them is Jaypee Karcham Hydro Corporation in which Jaypee will acquire a 55.36% equity stake for Rs 930 crores which is engaged in building the Karcham Wangtoo 1,000 MW hydro electric power project. The second company is Jaypee Powergrid which will engage in the transmission system of the Karcham Wangtoo project. The stake in this company would be 23% stake for Rs 69 crores. The project would be commissioned in 2011.
Of the objects stated above, the company requires debt only for the Nigrie project,while the other objects are proposed to be financed wholly out of the issue proceeds.
The company proposes to raise Rs 1,500 crores from the issue and Rs 3,500 crores as term loan from ICICI Bank for which it has received the LoI from the bank in December 2007.
The company intends to use the proceeds from the issue to part finance the above-mentioned project cost of Rs 5,000 crores. The company will deploy Rs 3859.04 crores for plant and equipment , civil works, infrastructure and land and site development; Rs 277.60 crores for transmission line and rakes of bottom open wagons;Rs 825.7 crores for overheads and preliminary expenses, financing costs and contingency provisions and Rs 37.66 crores for working capital requirements.
Jaiprakash Associates Ltd (JAL), the promoter of the company is the flagship company of the Jaypee Group which is a diversified infrastructure group with interests in civil engineering and construction, cement, power, real estate, expressways, hospitality, golf courses and not-for-profit education.
The company currently operates the largest hydro-electric power plant in the private sector - a 400 MW run-of-the-river hydro electric power plant consisting of four 100 MW units on the river Alaknanda in Uttarakhand that was commissioned in October 2006.
The company now proposes to set up a 1,000 MW (2x500 MW) coal-based thermal power plant at Nigrie in Madhya Pradesh which is expected to be commissioned in 2012 and is proposed to be set up using supercritical technology which will ensure efficient energy use and reduction of emissions. JAL and Jaypee Ventures Private Limited, which are both part of the Jaypee Group, own 80.56% and 15.02%, respectively, of Equity Shares of JPVL.
For the year ending March 31, 2007, the company recorded total income o fRs 216.59 crores and net profit of R s71.78 crores. For six months ended September 30, 2007, the company income was Rs 242.80 crores and net profit was Rs 132.68 crores.