Bajaj Energy IPO

About Bajaj Energy IPO

The IPO of Bajaj Energy comprises a fresh issue and an offer for sale. The fresh issue aggregates up to ₹5150 crores and the offer for sale is up to ₹300 crores. The total issue size is pegged at ₹5450 crores. It’s a book-built issue. The price band is TBA. The IPO opens on TBA and closes on TBA.

The listing date is on TBA, and the allotment date is TBA. The credit of shares to the Demat accounts of allottees will take place on TBA, while the initiation of refunds will take place on TBA.

Bajaj Energy is one of the largest private sector thermal generation companies in Uttar Pradesh. The company has a track record of developing, financing and operating thermal power plants in India. The company has a total gross installed capacity of 2,430 MW.

Objectives of Bajaj Energy IPO

The company proposes to utilise the IPO proceeds for:

• Purchase of 69,936,900 equity shares of face value of ₹10 each of LPGCL (LPGCL shares) from BPVPL and BHSL
  
• General corporate purposes
  

Industry Outlook

CRISIL Research expects around 37 GW of conventional power generation capacity to be added by fiscal 2023. Beyond fiscal 2018 capacity additions are expected to slow down gradually as compared to an average of 17-17.5 GW per year.

CRISIL Research expects coal-based capacities to account for 81% of total conventional power generation capacity additions from fiscal 2019 to fiscal 2023. It estimates 30 GW to be coal-based capacity and the remaining to be hydro-based and nuclear power-based capacity. The Government has initiated several steps to improve the utilisation of thermal power plants in India, resolve key bottlenecks and focus on dealing with stressed assets in the thermal power sector in India.

Company Information

Bajaj Energy, along with LPGCL, is one of the largest private sector thermal generation companies in Uttar Pradesh. It has a track record of developing, financing and operating thermal power plants in India.

It has a total gross installed capacity of 2,430 MW, comprising 450 MW from five operational plants of 90 MW each, owned and managed by BEL (the ‘BEL Power Plants’) and 1,980 MW from the power plant owned and managed by LPGCL (the ‘LPGCL Power Plant’), which it intends to wholly acquire from the proceeds of the offer.

Strengths of Bajaj Energy

• One of the largest independent power producers in Uttar Pradesh with long-term, regulated PPAs with a take-or-pay feature
  
• Secured fuel supply
  
• Successful track record of developing, financing and operating thermal power plants
  
• Well-positioned to capitalise on the growth and demand of Uttar Pradesh’s power industry
  
• Established management team with extensive operational experience
  

Risks of Bajaj Energy

• Reliance on single customer and inability or failure by the customer to meet its payment commitments will have a significant and material adverse effect on BEL’s financial condition
  
• Return on equity payments during the period when coal linkage was not available
  
• Recovery of fixed tariff charged for the period in which a transmission line was not made available
  
• Contractual risks under its PPAs with its power purchasers which are government entities
  
• Inability to ensure uninterrupted availability of coal at competitive prices may have an adverse effect on business
  
• Proposed acquisition of the remaining approximate 79.31% interest of LPGCL is subject to risks
  
• Subject to operational risks which may disrupt power plant operations
  
• Cost overruns in the development, construction or operation of any future projects may adversely affect business, prospects
  

Anchor Investor Bidding Date

TBA

IPO Registrar and Book Running Lead Managers

• IPO Registrar: Link Intime India
  
• Book Running Lead Managers: Edelweiss Financial Services, IIFL Holdings, SBI Capital Markets. IDBI Capital Markets is the co-book lead manager.
  

Bajaj Energy Business Model

Bajaj Energy is into the business of developing, financing and operating thermal power plants in India. As per its draft red herring prospectus, it operates five coal-based thermal power generation plants, each comprising two 45 MW generating units that have commenced operations and are income-generating. These power plants have been fully operational since 2012.

Bajaj Energy Growth Trajectory

The EBITDA margin of Bajaj Energy jumped from 38.90% in FY 16 to 46.70% in FY 18, while the average plant availability factor percentage (which is a measure of the frequency at which a power plant is available to generate power) of the Bajaj Energy power plants was approximately 85.52%, 85.48% and 87.12%, respectively. Secured fuel supply and an established management team have helped the company grow over the years.

Bajaj Energy Market Position

Bajaj Energy is one of the largest private sector thermal generation companies in Uttar Pradesh. As per its DRHP, it operates five coal-based thermal power generation plants each comprising two 45 MW generating units that have commenced operations and are income-generating.

All its assets are based in Uttar Pradesh, which according to the CRISIL Report, is one of the largest and most densely populated states in India, and also the state with the second highest power demand in the country.

How to Check Allotment Status of Bajaj Energy IPO?

1. Visit the Registrar’s Website

• Visit the website of Link Intime India
  
• Choose ‘Public Issues’ from Investor Services dropdown
  
• Choose the name of the company from ‘Select Company’ dropdown
  
• Enter any of these - PAN Number, Application Number, DP/Client ID, Account Number / IFSC
  
• Click on Submit to check the status
  

2. Check on the National Stock Exchange Website

The National Stock Exchange (NSE) website has an IPO bid verification module. You can use it to check the allotment status of Bajaj Energy IPO. Go to the NSE website and find the ‘Invest’ tab. Click on ‘Verify IPO Bids’ under ‘Resources & Tools’.

On the NSE IPO bid verification page, enter:

• Company name from dropdown
  
• Application number
  
• PAN
  

Then click ‘Submit’ to know the allotment status.

3. Check on the BSE Website

The Bombay Stock Exchange (BSE) also has an IPO allotment status page. Go to the BSE website and find the ‘Investors’ tab. Under ‘Investors’, click on ‘IPO’. This will take you to the IPO allotment status page. On the BSE IPO page, follow these steps:

• Select ‘Equity’ from the dropdown menu
  
• Choose ‘Bajaj Energy’ in the next dropdown
  
• Enter your application number
  
• Enter your PAN
  
• Click ‘Search’ to know allotment status
  

How to Apply for the Bajaj Energy IPO?

To apply for this IPO:

• Log in to your Kotak Securities Demat account: Log in to your Demat account to access IPO investments. Next, select the current IPO section.
  
• Specify IPO details: Enter the number of lots and the price you wish to apply for.
  
• Enter UPI ID: After entering your UPI ID, click submit. This will place your bid with the exchange.
  
• Mandate Notification: Your UPI app will receive a mandate notification to block funds.
  
• Approve Request: Your funds will be blocked once you approve the mandate request on your UPI.