Indian oil giant mulls £1bn float
JUBILANT Energy, an Indian-based oil and gas exploration company, is considering a flotation on the London Stock Exchange, according to City sources.
City stockbroker Evolution Securities, assisted by Renaissance Capital, is testing out the appetite for a money-raising in London, say the sources.?
A spokesman for Evolution told City A.M. “Clearly it has been looking at this for a while with a view to doing something later in the year…it is looking at different ways of doing something.”
There are suggestions that a flotation would look to raise around £300m on the London markets and that the company, which is part of the Jubilant Bhartia Group, could be valued at up to £1bn.
Last week an oil exploration group Fairfield Energy pulled its flotation after attracting less shareholder interest than it had expected. It was hoping to raise around £330m.
The online grocery group Ocado is closing its own flotation today, with institutions griping about its proposed £1bn valuation.
Jubilant Energy has tried to float in London before. Three years ago JP?Morgan tried to pull off a deal but it failed to go ahead with City sources saying that “the numbers just didn’t add up” for the sponsoring banks.
There were suggestions yesterday that a host of other advisers have been approached in recent months about putting a float together but have not been able to make the numbers work either.
Goldman Sachs, whose oil experts and BP adviser Julian Metherell is said to have worked on a possible Jubilant float in recent months, declined to comment.
Jubilant Energy is part of the Jubilant Bhartia Group, a huge Indian conglomerate run by Shyam Bhartia and Hari Bhartia. Its chief executive is Ajay Khandelwal. It has oil assets in India, Australia and Yemen.
Another Indian energy group, Essar Energy, recently floated in London and although first day trading was disappointing the stock is now performing well.
One source said there were a large number of Indian groups wishing to raise money in London but advisers were finding it hard to distinguish the good companies from the less well managed.
There were question marks about the corporate governance of Essar Energy when it floated, with institutions worried that it had a lack of truly independent directors on its main board.