The Jai Prakash Power Ventures Ltd is a company dealing with mainly hydroelectric power generation plants in the country. Lately, the company has hired the services of many companies to sell its equity shares, which are 104,000,000 in number. The article below gives information on the equity shares and the possible risks involved in investing in the company’s IPO (initial public offer).
Established in the year 1995, Jai Prakash Power Ventures Ltd., is involved in planning, developing, implementing as well as operating projects related to hydroelectric power in India.
It has several important projects within its functional area, the prominent ones being:
The 400 megawatts plant of hydroelectric power comprising of 4 hundred megawatt units in the state of Uttarakhand.
In the district of Madhya Pradesh, the company has a thermal power plant, which is “coal fired”.
The Deutsche Bank AG along with Enam Financial Consultants Ltd., were hired by Jai Prakash Power Ventures Ltd. There are other financial institutions also involved in this deal. The financial institutions were hired for selling shares to the public.
The sale of these shares is likely to raise as much as USD$1 billion. The proposed sale of these equity shares are likely to be listed on the National Stock Exchange (NSE) as well as on the Bombay Stock Exchange(BSE).
Risks Factors of the Jai Prakash Power Ventures Ltd IPO:
There are several risk factors associated with these equity shares. In this respect, the risk factors may be:
Risk factors related to the Business
In this category, there are many risks associated with the initial public offer(IPO), mentioned here are two of them.
The new projects undertaken by the company has gestation periods, which are quite long and an investors may have to wait before the ROI or the returns on investment are actually significant.
The projects launched by the company are determined by operating risks, construction as well as availability of finances.
Risk factors involved in the power business
This includes the general risks, which may be involved in running a power business.
The power plant operations may be affected by grid failures( transmission) and breakdown in civil structure.
There is extensive competition from domestic as well as international companies also operating in the power sector.
External risk factors.
The company may also be subject to several external factors, thereby affecting the equity shares.
Rate of inflation may influence the operational factors as well as the financial condition of the company.
Another factor, which may impact the companies’ IPO include the changes in the currency(rupee) against currencies in the foreign countries.
The company is planning to issue as many as 104,000,000 number of equity shares.
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Last Updated on : 30th July 2013