Essar Group plans LSE listing to raise $3 billion

The Essar Group, one of the country's conglomerates with interests that range from shipping to mobile telephony, is considering raising up to $3 billion (Rs13,827 crore) by listing its oil and power assets on the London Stock Exchange, according to several reliable reports.

The company however has refused to confirm the reports, saying on Sunday that while the group is always looking at a range of options to fund its operations, it has ''not yet made any specific decision with regards to its future financing".

The deal, which would value Essar's energy businesses at $12 billion, would be the country's biggest overseas listing. It is also one of the strongest options to finance the group's $8-9 billion expansion plan that would strengthen the group's position in the top ranks of India's oil refining and electric power generation sectors.

The Financial Express points out that the Essar listing would also be a boost to the LSE, which recently lost out on the listing of Rusal, the aluminium group controlled by Russian oligarch Oleg Deripaska. It opted to float on the Hong Kong exchange instead.

Under LSE rules, Essar would be required to list 20-25 per cent of the energy company, raising $2.4-$3 billion, which would make the listing larger than previous Indian overseas initial public offerings in London and New York.

At the upper limit, the deal would also be on a par with India's largest domestic IPO, the $3 billion listing of Reliance Power in early 2008.