Singaporean infrastructure conglomerate Sembcorp Industries Ltd said on Friday that it will list its Indian energy unit, Sembcorp Energy India Ltd, and look to mop up an additional S$500 million ($378 million) from the sale of certain utilities assets as part of a larger restructuring plan.
Sembcorp Energy India has filed a draft red herring prospectus (DRHP) with the country's markets regulator for an initial public offering (IPO).
The IPO will include a fresh issue of shares to raise up to Rs 4,095 crore ($631 million) and an offer for sale of 146.78 million shares by Sembcorp Industries and local joint venture partner Gayatri Energy Ventures India Ltd, according to the draft prospectus.
Sembcorp Energy is also considering a pre-IPO placement of up to Rs 650 crore, the DRHP showed. Axis Capital, Credit Suisse, CLSA and SBI Capital Markets Ltd are managing the IPO.
The development comes days after Sembcorp Industries said it was reorganising its India energy business.
On Monday, Sembcorp announced that it would consolidate its thermal and renewable energy assets under unit Sembcorp Energy India Ltd, in which it will hold about 93.7% while its Indian partner Gayatri Energy Ventures will hold the remaining stake.
Sembcorp develops, owns and operates assets in both renewable energy and thermal power in India and its portfolio in the country has over 4,000 MW of assets.
Sembcorp Group has total assets of over S$23 billion and is listed on the main board of the Singapore Exchange.
Singapore’s state-owned investment firm Temasek Holdings Ltd is the largest shareholder in Sembcorp Industries.
In a statement on Friday, Sembcorp said it will reposition its portfolio across certain developing and developed markets and will deepen its presence in four key markets -- Singapore and Southeast Asia, China, India and the UK. It also said that it has set a target of doubling of its overall renewable energy portfolio to about 4,000 MW by 2022.
The parent company also reported a 85% fall in its fourth quarter net profit at $22.8 million.
Indian businesses
Sembcorp had entered the Indian energy market in 2010. The company develops, operates and manages the $3 billion Sembcorp Gayatri Power Complex in Andhra Pradesh, which has a total capacity of 2,640 MW across two power plants.
In 2015, Sembcorp had acquired a majority stake in Indian renewable energy firm Green Infra Ltd for $227 million.
Last year, Sembcorp also won a bid for an wind energy project in a government-run auction.
India’s ambitious target of setting up 100 gigawatt (GW) in solar capacity and 60 GW in wind energy capacity has made the country an attractive market for overseas energy firms and financial investors alike.
Over the past two years, Italy’s Enel Green Power, Canadian pension fund manager Caisse de depot et placement du Quebec (CDPQ), Dutch pension fund APG Asset Management, Japan's Softbank Group, and a unit of international private equity firm Abraaj Group have committed investments in the Indian renewable energy sector.
