Sembcorp Industries planning IPO for India unit to raise $500-600 million
Sembcorp India is expected to file its draft IPO papers with Sebi in February, Credit Suisse and Axis Bank are lead investment banks for the share sale
Mumbai: Singapore-based utility group Sembcorp Industries is gearing up to file for an initial public offering (IPO) of its Indian arm which could see the company raise around $500-600 million (about Rs3,200-3,800 crore), two people aware of the development said.
Sembcorp’s Indian arm comprises thermal and renewable power assets. “Sembcorp India is expected to file its draft IPO prospectus with Securities and Exchange Board of India (Sebi) sometime next month. The proposed IPO could see Sembcorp raise as much as $500-600 million,” said one of the two people cited above, requesting anonymity as he is not authorized to talk to reporters.
“Investment banks Credit Suisse and Axis Capital are managing the initial share sale of the company,” he said, adding that the company is yet to decide on the final structure of the share sale in terms of whether it will be a complete primary offering or a mix of primary and secondary share sale.
Mint reported on 3 October about Singapore-based power producer’s plans to list its Indian unit.
According to the second person cited above, Sembcorp India has a portfolio of 4,000 megawatt (MW) of operating power assets across thermal and renewable. “Its thermal power business comprises over 2,600MW, while the renewable business comprises of 1,400MW of operational and under development assets,” he said.
Credit Suisse declined to comment. An email sent to Axis Capital on Tuesday did not elicit any response. “We have a strong commitment to the growth and sustainability of our over 4,000MW renewable and thermal energy portfolio in India, for which we continually evaluate various commercial and financial options. We have no further comment at this stage but will make an official announcement if and when appropriate,” a spokesperson for Sembcorp said in an email response to queries regarding the Indian unit’s IPO plans. The company made its first power sector investment in India in 2010 when it acquired a stake in Gayatri Energy Ventures’s Thermal Powertech Corp. India, a thermal power plant.
In February 2015, Sembcorp Industries acquired a 60% stake in IDFC Alternatives Ltd-backed renewable energy firm Green Infra Ltd for Singapore $227 million. In August, Sembcorp Industries announced the acquisition of IDFC’s remaining 28% stake in SGI for Rs1,410 crore (around Singapore $301 million) to become its sole owner.
Sembcorp is among the few foreign utility firms that owns thermal power assets in India. Others include American firm AES and China Light and Power.
Sembcorp India’s plans to go public come at a time when the Indian IPO market has seen its best year ever and other renewable power producers too have been contemplating public listings. In 2017, 36 companies raised Rs67,147 crore through the IPO route, while 26 companies raised Rs26,493.8 crore in 2016, data from primary market tracker Prime Database shows.
In December, The Economic Times reported that renewable energy producer Renew Power Ventures had appointed investment banks Goldmans Sachs, Kotak Mahindra Capital Co. Ltd and JM Financial for a $700 million IPO. In September, ACME Solar Holdings filed draft papers with Sebi for a Rs2,200 crore initial share sale.
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