Lehman Brothers-backed KSK Energy Ventures has filed its DRHP with SEBI on 14th February, 2008 to enter the capital market with an IPO of 5.19 crore equity shares of Rs 10 each at a price to be determined through a book building process at a later stage. The company also proposes to make a pre- IPO placement of up to 1.73 crore equity shares. The issue will constitute 15% of the fully diluted post issue equity share capital of the company.
The company proposes to list its shares on BSE and NSE. The BRLMs to the float are Kotak Mahindra Capital, IDFC-SSKI, Morgan Stanley India, Edelweiss Capital and Axis Bank.
The object of the issue is to part finance the company's project cost of Rs 6,874 crore which involves a 540 MW coal-based power project at Warora in Maharashtra through an SPV - Wardha Power Company Private Ltd. (WPCPL); a 1800 MW thermal power plant in Chattisgarh and a 130 MW run-of -the -river hydro power plant at Dibbin, Arunachal Pradesh.
The company intends to use the proceeds from the issue to part finance the above mentioned project cost. It will spend Rs 98.40 crores for land & site development; Rs 4,608 crores for EPC cost (power plant island and balance of plant supplies, erection and commissioning ); Rs 390 crore for non- EPC works; Rs 335 crores for evaluation, transmission line and plant unloading point; Rs 248 crores for overheads, preliminary and pre-operative expenses; Rs 911 cores as financing cost; Rs 217 crores for contingency provisions and margin money for working capital of Rs 65 crores
KSK Energy Ventures, incorporated in 2001, is an emerging player in the power sector. The company is engaged in captive power plant development, offering electrical power to domestic and international businesses.
KSK Power Ventures Plc, was recently listed on Alternate Investment Market of the London Stock Exchange. It raised $100 million from this float, out of which $85 million was used by its Indian unit. KSK Energy Ventures Pvt.Ltd. to settle a reorganization of Lehman joint venture arrangements. As per the arrangement with LB India Holdings Mauritius I Ltd., Lehman would sell its entire stake in the joint venture company KSK Electricity Financing India Pvt. Ltd. to KSK Energy Ventures. Lehman will also subscribe for a 33.42% stake in KSK Energy Ventures.
The company has entered into an arrangement with Gujarat Mineral Development Corporation (GMDC) which has been allocated a coal block in Chattisgarh. GMDC retains a right to invest up to 26% of the equity of the power project.
The company has sourced funds for the first phase of the 540 MW power project from Rural Electrification Corporation of Rs 555 crore, HUDCO Rs 233 crore and Indian Overseas Bank of Rs 100 crore.
The company has tied up the 270 MW (two units of 135 MW) of the project of 540MW, which it is presently implementing, with Viraj Properties which is also chipping in with equity. A 25-year power purchase agreement at a uniform price, has been signed. The decision on supply of the balance power generated would be taken later. A Chinese company, SEDC is supplying the equipment for the project.
For the year ended March 31, 2007 the company achieved a turnover of Rs 92.82 crores and net profit of Rs 18.86 crores as against an income of Rs 37.43 crores and net profit of Rs 7.27 crores for FY06. And for 6 months ended September 30, 2007, the income posted was Rs 81.30 crores and net profit of Rs 11.97 crores.