IPO Dates
Important dates with respect to IPO allotment and listing
Ipo Open Date
To be announced
About Company
Founded in 2008, Bajaj Energy Limited is one of the largest private sector power thermal generation companies in Uttar Pradesh, India. It holds several years of experience in running, building and financing power generation facilities. In fact, the company has successfully set up a thermal power generation capacity of 2430 MW that runs on coal.
450 MW of this capacity comes from 5 plants spread across 5 locations in the state. The owner of these plants is BEL. On the other hand, the rest of 1980 MW comes from plants owned by LPGCL. Further, Bajaj Energy Limited is making an effort to increase its demand. For this purpose, it plans to add conventional power generation capacity in the next two years. With SEBI’s nod, Bajaj Energy Limited now plans to float its initial public offering.
Objectives of Bajaj Energy Limited IPO
The following are the objectives that Bajaj Energy Limited is planning to fulfil from the funds collected through IPO:
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Repayment or advance payment of the company debts
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To fund the purchase of 6,99,36,900 shares of Lalitpur Power Generation Corporation from Bajaj Hindustan Sugar and Bajaj Power Generation. It will amount to Rs. 4,972 crores.
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For general corporate purposes
Why Should I Invest in Bajaj Energy Limited IPO?
Individuals looking forward to participating in the initial public offering of Bajaj Energy Limited can consider the following reasons to invest in it:
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There is a high chance of increasing demand for power supply after it completes the electrification of 100% of the villages.
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The company has a successful track record in carrying out its operation, i.e., building, financing and running thermal power plants.
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Bajaj Energy Limited has a management team with years of experience.
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This company has a long-term fuel agreement established with Central Coal Fields Ltd. that will continue for years.
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At Bajaj Energy Limited, the professionals follow sustainable operational practices giving this company a competitive edge.
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This firm has received awards for its safety measures in 2015, 2016, and 2017. Also, the authorities have recognised it for having the best water-efficient plant under the 500 MW category.
Bajaj Energy Limited IPO - Details
Bajaj Energy Limited filed its draft red herring prospectus with the market regulator SEBI (Securities and Exchange Board of India) in 2019. Now, it has received the approval to launch its IPO to raise a fund of Rs. 5,450 crores. The initial share sale of Bajaj Energy Limited will contain both a fresh issue of equity shares and an OFS.
This fresh issue component of this public offering will amount to Rs. 5,150 crores, whereas the offer for sale (OFS) will be Rs. 300 crores.
IPO Financials
| Financial year | Total Assets in Millions | Total Income in Millions | Profit After Tax in Millions |
|---|---|---|---|
| FY 2018 | Rs. 34,741.55 | Rs. 8,976.25 | Rs. 416.82 |
| FY 2017 | Rs. 36,840.97 | Rs. 14,058.76 | Rs. 882.50 |
| FY 2016 | Rs. 35,900.48 | Rs. 14,070.99 | Rs. 1,028.35 |
Know before investing
Strengths
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The company is to complete 100% electrification of villages, due to which it expects a soaring demand.
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Bajaj Energy Limited has a highly-versed management team holding years of experience.
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It has registered a long term-agreement with Central Coal Fields Ltd. for fuel supply. Central Coal Fields Ltd. is a subsidiary of Coal India Ltd.
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The company has the trust of its customers when it comes to building, financing and running thermal power plants.
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Bajaj Energy Limited has a high coal-based thermal power generation capacity, i.e., 2,430 MW. Under this, it has 5 plants of 450 MW in five different locations of UP and other power plants sourcing the rest 1,980 MW capacity.
Risks
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Bajaj Energy Limited is currently involved in an open dispute with UPPCL regarding payment tariffs. If this dispute goes against LPGCL, it will have to write off profits for 2018.
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For thermal power generation, the company needs an ample supply of coal. If not, it can disrupt fuel supply and cause transportation and supplier issues.
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The selling rate of generated power supply is not in the hands of BEL or LPGCL. Rather, it is the UPERC that decides the rate. So, if any policy change creates a spike in price, the company cannot align the cost with its price, leading Bajaj Energy Limited to a loss.
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There is always a risk relating to environmental damage and pollution regarding thermal power production.
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It has defaulted several times in paying back loans.
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Peer Comparison
| Competitor | Market Capitalisation | PAT Growth % |
|---|---|---|
| Tata Power Company Limited | Rs. 81,001.86 Cr. | 58.31% |
| NTPC Limited | Rs. 1,60,916 Cr. | 20.58% |
| JSW Energy Limited | Rs. 58,001.44 Cr. | 13.71% |
| Torrent Power | Rs. 26,914.54 Cr. | 23.85% |
Bajaj Energy IPO FAQs
The following are the percentages that different shareholders of LPGCL own:
- BPVPL holds 61.80%
- BEL holds 20.69%
- BHSL holds 17.51%
Bajaj Energy Limited filed its DRHP with the Securities and Exchange Board of India (SEBI) in April 2019. However, it received the market regulator’s nod in September 2019 to launch its IPO in 2021.
The following are the lead managers of Bajaj Energy Limited IPO:
- IIFL Holding Limited
- Edelweiss Financial services Limited
- IDBI Capital Markets & Securities Limited
- SBI Capital Markets Limited
The following are the promoters of Bajaj Energy Limited:
- Shishir Bajaj
- Bajaj Power Ventures private Limited
- Kushagra Bajaj
- Apoorva Bajaj
- Minakshi Bajaj
Bajaj Energy Limited has not yet disclosed the price band for its initial share sale.
