Essar looks to $750m listing

INDIAN industrial giant Essar is set to raise about $750m (£485m) by floating its infrastructure assets on the London stock exchange next year.

The Mumbai conglomerate is believed to have hired JP Morgan and Credit Suisse to advise on the initial public offering (IPO), which would provide foreign cash to boost its expansion plans.

The move could see Essar’s port and construction units merged and listed as Essar Infrastructure.

The group, which is controlled by billionaire brothers Shashi and Ravi Ruia, is considering an IPO in early 2012 in the hope that storms hitting global markets will have calmed by then.

Market turmoil has forced several major listings around the world to put plans on hold, such as those scheduled by Facebook, Groupon, Manchester United and Fitness First.

Last night a spokesman for Essar declined to comment on the IPO plans beyond an earlier statement saying it is always considering options for capital-raising and that no specific transaction has been proposed.

Essar has interests in steel, ports and logistics and telecommunications. An IPO in Britain would make it easier to raise money to buy assets here and in Europe and would be the largest overseas listing by an Indian company after the group’s own Essar Energy floated for £1.3bn in London in May last year.

Shares in Essar have been hit, however, by delays to key power projects, caused by battles with Indian regulators. They reached a high of nearly £6 at the end of last year but closed down 3.57 per cent last night at 237.7p

Last month Essar Energy, a power generator and refiner, was reported to have entered talks with firms including Exxon Mobil, Chevron, and ConocoPhilips to acquire oil and gas assets in Africa, Latin America and Australia.

More Indian companies are going overseas for listings because they face high borrowing costs and depressed capital markets in Asia’s third-largest economy.