OPG Power Ventures, which is listed on the London Stock Exchange’s Alternative Investment Market (AIM), is planning an Indian listing which could see the company raise at least Rs1,000 crore, two people aware of the development said.
“They are looking to raise at least Rs1,000 crore (approximately $150 million). However, that figure could go up to $200 million (approximately Rs1,350 crore),” said one of the two people cited above, requesting anonymity as the talks are private.
Chennai-based OPG operates and develops power generation assets in India and currently has 750 megawatts (MW) of thermal power assets in operation. It is also undertaking the development of solar energy projects with an initial focus on commissioning at least 300MW, according to the company’s website.
OPG has hired investment banks Deutsche Bank and ICICI Securities to manage the IPO, said the second person cited above, also requesting anonymity. A spokesperson for Deutsche Bank declined to comment. Emails sent to ICICI Securities remained unanswered.
OPG said it will evaluate the IPO plan but denied it had formally hired investment banks for the share sale.
“We have been approached on the idea of the Indian IPO. However, we have not formally engaged anyone on the subject. It is still something that we will look into and evaluate with the other things that we are evaluating. Whatever we do pursue, we want it to be good for our existing shareholders,” said a London-based spokesperson for OPG Power Ventures over the phone on Monday.
OPG has been listed on London Stock Exchange’s AIM since 2008.
The company generated a revenue of Rs1,082 crore in the first six months of fiscal 2016-17, an increase of 94% over the previous year, according to investor presentations made by the company.
The firm reported an Ebitda (earnings before interest, taxation, depreciation and amortization) margin of 36% in the period, documents show.
The company plans to grow its portfolio from the existing 750MW to more than 1,200MW in the next five years, across a mix of thermal and renewable projects.
The company also plans to build its thermal portfolio through both organic growth and acquisitions.
OPG’s thermal power projects are located in the states of Tamil Nadu (450MW) and Gujarat (300MW).
Its solar power portfolio currently includes assets totalling 62MW in Karnataka which are expected to commence operations in 2017, and a 124MW project in Karnataka which is expected to come online by 2019.
OPG’s IPO plan comes at a time when the renewable sector in India has been witnessing high levels of activity both on the fund-raising front as well as in terms of mergers and acquisitions, on the back of high investor interest in the sector.
Prime Minister Narendra Modi is banking on renewables to fight climate change and has set an ambitious target of increasing India’s clean energy capacity more than fivefold to 175 gigawatts (GW) by 2022.
Several renewable energy firms have evinced interest in going public.
In September, Mint reported Hyderabad-based renewable energy producer Mytrah Energy India Pvt. Ltd has started preparations for an IPO that could see the company raise anywhere between $250 million and $300 million. Mytrah has hired investment banks Nomura Financial Advisory and Securities (India) Pvt. Ltd and IDFC Bank Ltd to manage the share sale.
Also in September, Bloomberg reported ReNew Power Ventures Pvt. Ltd wants to raise a part of the $300 million required for the expansion of its green energy projects through an IPO.
In April, Mint reported that Hindustan PowerProjects Pvt. Ltd is planning to go public in 2017. “Depending on the incremental capital requirement, we may look at an IPO some time in 2017,” company chairman Ratul Puri said.
In October, Azure Power Global Ltd debuted on the New York Stock Exchange after its IPO. Azure is the first Indian renewable energy company to list on the US stock market.