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Energy Efficiency Services eyes IPO after entering UK

LiveMint logoLiveMint 10-05-2017 Anindya Upadhyay

New Delhi: India’s state-backed Energy Efficiency Services Ltd is considering an initial public offering as part of a plan to bring its power-savings business model to new markets including the UK.

EESL could launch its IPO as soon as the December quarter, after a planned September issue of $100 million in masala and dollar bonds in the UK, managing director Saurabh Kumar said in an interview with Bloomberg. The company doubled revenue to Rs1,400 crore ($217 million) in the fiscal year ended 31 March and will release full financial results next month, he said.

“If we feel we’re headed in the same direction of growth, we will start the process in September for an IPO in the fourth quarter,” Kumar said.

EESL could list as much as 20% of its shares and will have an equity value of Rs1,500 crore, he said.

Energy Efficiency Services has tapped into the growing market for power-saving light bulbs and appliances with a business model that puts more productive technologies into consumer homes. It’s already dispensed over 233 million LED light bulbs and has zeroed in on partnerships with UK companies.

EESL is a joint venture between India’s ministry of power and state-backed companies in the power sector such as NTPC Ltd, Rural Electrification Corp., Power Grid Corp. of India Ltd, Power Finance Corp., as well as the Bureau of Energy Efficiency.

The company is already preparing for its September bond issue in the UK, according to Kumar. “We have appointed Moody’s Corp. as our ratings agency and have two arrangers—Barclays Plc and Standard Chartered Plc and will be doing this in London,” he said.

EESL plans to invest £100 million ($129 million) over the next three years in the UK toward various energy efficiency programs, according to a government email. Power, Coal and mines minister Piyush Goyal will formally announce plans during a 13 May London visit.

The company plans to replicate the pay-as-you-go model for distributing half a million LED bulbs in the U.K. this year at a price of £3 each—a third cheaper than similar products sold in stores, Kumar said. With the help of UK partner Cenergist Ltd, EESL plans to replace incandescent and halogen bulbs in social housing cooperatives with energy efficient LED lighting.

To bolster its UK expansion, EESL acquired two local operating companies running energy efficiency programs for £6.8 million, Kumar said, adding that India is also extending the LED bulb program to several countries in South and South East Asia. Bloomberg

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