An Indian growth story

AFTER a shaky start, investors are finally seeing Essar Energy for the company it really is: a liquid, London-listed firm that is well-positioned to capitalise on India’s rapidly growing energy demand. Energy consumption will soar in India in future years: 45 per cent of households don’t have access to electricity, while those that do have a patchy supply (24-hour electricity is virtually unheard of outside the major cities). The average Indian citizen uses around 610 kilowatts of electricity a year – around a quarter of the per capita consumption in China.

Despite its growth potential, nagging concerns still weigh on the stock, which has staged a recovery since falling seven per cent on its first day of trading but still changes hands for less than the 420p listing price (it closed at 406.8p yesterday). It still needs to appoint a fifth independent non-executive director to counter suggestions that its board is too close to Essar Group, the firm’s biggest shareholder. Only then will it get the respect it deserves.