Jaiprakash Power plans $1 bn IPO

Hires Deutsche Bank AG and Enam Financial Consultants to sell shares for the first time.

Jaiprakash Power Venture Ltd, a unit of India's biggest builder of dams, has hired Deutsche Bank AG and Enam Financial Consultants Ltd to sell shares for the first time, three people familiar with the deal said.

ICICI Securities Ltd, JM Financial Ltd, JPMorgan Chase & Co and SSKI Securities Ltd will also arrange the sale that may raise more than $1 billion (about Rs 4,000 crore) , the people said, requesting anonymity before a formal announcement.

"We have hired bankers for the share sale," said Sunita Joshi, executive general manager at parent Jaiprakash Associates Ltd. She declined to elaborate.

Executive Chairman Manoj Gaur in October said the group will raise funds to boost electricity generation in line with a government plan to double power investment in five years to plug a shortfall.

Jaiprakash joins JSW Energy Ltd and Reliance Power Ltd in planning $5 billion of power IPOs this week, more than half the record total raised by all Indian companies in 2007.

JSW Energy, a unit of the `JSW Group, plans to dilute less than 20 per cent of its capital in an issue that could raise Rs 3000-4000 crore ($760 million-$1 billion), according to a banking source close to the deal. The company is expected to file initial documents with the market regulator in a couple of weeks.

Reliance Power could raise close to Rs 12,000 crore ($3 billion) in the country's biggest initial public offer which opens January 15. Reliance Power, 50 per cent owned by power producer Reliance Energy Ltd, is part of Anil Dhirubhai Ambani Group (ADAG), which owns the rest through other group companies.

"There's a huge demand-supply gap in the power sector which offers good growth opportunity," said R Rajagopal, chief investment officer at DBS Chola Mutual Fund, which has the equivalent of $1 billion in assets. "There's also efforts by the government to boost power production."

Companies in all sectors raised $8.5 billion in IPOs last year, as the biggest rise in India's Sensitive Index in four years spurred companies to raise funds, according to data compiled by Bloomberg.

India's government has set a target to add 78,577 mw generation capacity in the five-year development plan ending March 2012, from 132,330 mw at the end of March 2007, according to the Central Electricity Authority.