Mumbai-based Essel Infra Projects Limited is planning to raise INR15 billion via its initial public offering (IPO). Though the company has not filed its draft red herring prospectus (DRHP) till date, it intends to do so in the next quarter. Essel Infra is understood to have hired ICICI Securities as its lead banker to manage the issue. The company intends to use the proceeds of the issue towards its road and renewable projects.
Usage of Proceeds
This Subhash Chandra-promoted company is planning a major push in the renewable energy industry and aims to add 12 GW of capacity in four years. This includes 4 GW of wind energy, 500 MW of waste-to-energy projects and 7.5 GW of solar power. Essel Infra’s current renewable energy portfolio consists of three operational solar projects along with three solar and one hydro project which remains under implementation. Total capacity of existing projects is 110 MW in solar energy and 80 MW in hydro energy. Essel Infra is also a part of the committee building five smart cities in the country.
Essel Infra’s Background
Essel Infra Projects Limited is a successful venture by the Essel Group. It has presence in more than 11 states and across 50 cities. In 2007, Essel Infra ventured in infrastructure segment and at present the group has completed projects related to Integrated Utilities (Power, Water, Solid Waste Management and Cable & Broadband), Power Transmission & Distribution, Transport (Roads), Environment (Municipal Solid Waste), Renewable Energy (Solar & Hydro) and Urban Infrastructure.
Essel Infra’s Ahmedabad Godhra Toll Road project was awarded “Most Environmental Sustainable Developed Project” by India Infrastructure Finance Company in association with World Bank/Asian Development. Lucknow Raebareli Project won the Asia Pacific Transport Deal of the Year Award by Euromoney, Project Finance Magazine in 2014. Essel Infra is also part of committee building five smart cities in India.
India’s red hot IPO market
When it files prospectus, Essel Infra will be the latest in the long and growing list of companies looking to bring IPOs. This route has become especially popular with companies in the infrastructure space which is currently under tremendous burden of highly leveraged balance sheets and slow economic activity. Essel Infra IPO would possibly be the largest IPO in infrastructure space. So far this year, 15 IPOs have raised around INR63.5 billion in the primary market. This week Coffee Day Enterprises Limited IPO will open on 14 October whereas InterGlobe Aviation is planning to enter the market by month-end.