New shares in Essar Energy, which will be 75 per cent owned by its Indian parent, will be priced at between 450-550p. At the top end of the range, Essar Energy will be valued at around $11bn, making it one of the top 50 companies on the market by valuation.
The pricing will close on 29 April, at around which time a prospectus will be issued. The company’s advisers said institutional shareholders had already seen a pathfinder prospectus but they declined to make this available.
The Indian parent group is selling a minority stake in Essar Energy to institutions as it looks to tap new investors to fund its ambitious growth plans, including buying coal mines to expand power capacity, and the development and exploration of oil and gas blocks.
The offering would help expansion plans at Essar, controlled by billionaire brothers Shashi and Ravi Ruia. Prashant Ruia (pictured left) will be Essar Energy’s vice-chairman.