1. Essar plans $8 billion UK listing
TNN, Mar 8, 2010, 12.36am IST
MUMBAI: In an ambitious fund-raising move not undertaken by an Indian company, the $15-
billion Essar Group is reported to have begun preparations for an $8-billion listing on the
London Stock exchange. ‘‘Essar is looking at a London listing of a holding company which will
have their refinery, power, exploration and production businesses,'' a British daily reported.
The listing move comes days after Essar's acquisition of US-based Trinity Coal for $600 million.
The group's $8-billion attempt will be by far the biggest listing by an Indian company. In 2008,
Reliance Power had mopped up $3 billion (Rs 1,100 crore) through an IPO in the domestic
market. Vedanta Resources had raised $876 million through listing on LSE in 2003. Globally,
ICBC (Industrial and Commercial Bank of China) had raked in $19 billion, the biggest so far, in
2006. Before the financial crisis choked the world market, Visa in March 2008 had mobilised
$17.9 billion.
Reacting to the report, an Essar spokesperson said: ‘‘The Essar Group is always looking at a
range of different funding options but has not yet made any specific decision with regards to its
future financing. The group works with a range of financial advisors who provide assistance.''
The listing could make Essar the first Indian company to enter UK’s main market since Vedanta
Resources forayed seven years ago.
Jagannadham Thunuguntla, equity head, SMC Capitals, said: ‘‘It's an ambitious move. It's
not a walk in the park. We are talking about Rs 36,000 crore. The Indian markets cannot raise
this whopping amount. Essar is in an expansion mode and they need that sort of fund. The group
must have already got assurances from international banks. Otherwise, they would not have
undertaken this move.''
The listing will give an opportunity to foreign hedge funds and FIIs to participate in the entire
Essar conglomerate of various subsidiaries — from shipping to steel. Thunuguntla said the move
will also help hedge funds and FIIs to have a lower currency risk vis-a-vis their most of the other
India investments.
He said the listing will help the Essar holding company to address separate FDI and FII
guidelines for its various businessess in a consolidated way.
The move comes days after Essar's acquisition of Trinity Coal for $600 million. ‘‘Group
chairman Ravi Ruia has been based in the group's London offices in Berkeley Square for nearly
four months, developing the group's international plans, and his nephew, Prashant, the group
chief executive, has been shuttling back and forth from Mumbai,'' the Telegraph report said.