India’s Richest Woman Plans Power IPO as Rivals Wane

Jindal Power Ltd., controlled by India’s richest woman, plans to raise as much as 100 billion rupees ($2.1 billion), testing appetite for energy shares after investors lost money on every Indian utility IPO this year.
The generating unit of Jindal Steel & Power Ltd. will seek shareholder approval for the sale, according to a statement yesterday. The offer will be the second by the family of billionaire Savitri Jindal after JSW Energy Ltd. on Dec. 9 closed its initial sale.


Jindal Power, India’s biggest power IPO in two years, follows offers by Adani Power Ltd. and Indiabulls Power Ltd. that are trading below their sale price. The New Delhi-based company may outperform because it generates more electricity than its rivals in a nation where energy demand outstrips supply, according to Macquarie Group Ltd.
“Jindal Power will trade at a significantly higher valuation compared with its peers,” Rakesh Arora, an analyst at Macquarie, said by telephone from Mumbai. “It already has assets that are operating and are highly profitable.”


The parent company’s shares rose 2 percent to 743.8 rupees at 10:18 a.m. local time after gaining as much as 2.6 percent. The benchmark Bombay Stock Exchange Sensitive Index advanced 0.8 percent.



The family fortune of Savitri, the matriarch of the O.P. Jindal group, more than quadrupled in the past year to $12 billion in part because of the 380 percent increase in Jindal Steel’s stock in 2009, according to Forbes Asia. Her sons manage the family businesses including Naveen who runs Jindal Power and Sajjan who oversees JSW Energy.



Naveen, chairman of Jindal Power and also a member of India’s parliament, didn’t take calls to his office or respond to e-mailed questions on the company’s share sale plans.


Jindal Power is yet to decide on the number of shares it will sell, Sushil Maroo, deputy managing director of Jindal Power, said by phone. He didn’t give details on the company’s expansion plans or timing of the sale.
Maroo said in an interview Sept. 15 that the funds may be used for a 134-billion-rupee plan to more than triple capacity to 3,400 megawatts. One megawatt is enough to power 200 middle class homes in India.
Raising Funds


Utilities are raising funds to build power plants as India aims to double generation capacity in the next seven years to sustain the world’s second-fastest pace of economic growth. The decline in energy shares contrasts with the 78 percent advance in the Sensex this year, the best performance since 1991.