John Energy, an onshore oil & gas service provider, has filed draft prospectus with capital market regulator SEBI to launch its IPO. The Ahmedabad-based company plans to raise as much as INR350 crore (INR3.5 billion) through the IPO which will include newly-issued shares as well as a sale of shares by existing investors. John Energy is backed by ace investor Rakesh Jhunjhunwala who is the second largest shareholder in the company.
John Energy IPO: Use of proceeds
According to the draft prospectus, John Energy IPO will raise INR218 crore by issuing new shares. The company plans to use INR164 crore towards repayment or pre-payment of borrowings while the remaining amount after issue related expenses will be used for general corporate purposes.
John Energy IPO: Jhunjhunwala onboard; IRC, IL&FS Financial Services to offload shares
In addition, the IPO will include an Offer For Sale (OFS) of 1,677,744 shares by India Rig Company (IRC) and IL&FS Financial Services Limited. India Rig Company currently owns 2,859,867 shares or 15.57% in John Energy and plans to offload 800,000 shares. On the other hand, IL&FS Financial Services’ investment – made in 2011 – is largely financial in nature and thus, it is looking to sell all the 579,830 shares it currently owns. Smaller numbers of shares will be offered by some executives.
As mentioned above, Rakesh Jhunjhunwala is also on board and holds 3,345,169 shares or 18.21% equity stake. Jhunjhunwala made his investment in 2006 in the company. Another prominent investor is ICICI Bank which owns 820,967 shares, translating to 4.47% pre-issue stake.
Oil & Gas services to E&P clients
John Energy offers a range of services to its exploration and production (E&P) clients. These include land-based drilling, well completion services, workover drilling, integrated contract services, gas compression services and gas processing services, including gas dehydration services. The company had a fleet of 34 rigs comprising of 19 drilling rigs and 15 workover rigs as of 31 December 2017.
In the year ended 31 March 2017, the company posted consolidated revenues of INR581.7 crore, compared to INR565.1 crore in the previous year. Its net earnings for the latest year stood at INR71 crore, more than double of the INR29 crore it earned in FY2016.