Jubilant Energy to raise $85 mn via LSE listing

NEW DELHI: Jubilant Energy, the privately-held oil exploration and production company of the Bhartia Group, will raise $85 million by selling a 21.8% stake to institutional investors and will start trading on the London Stock Exchange’s (LSE) AIM market from Wednesday.

“The fund will meet our exploration and working capital needs for next year,” Ajay Khandelwal, CEO at Jubilant Energy, told ET.

At present, Jubilant Energy has nine oil blocks with a total gas reserve of 151.2 million barrels, of which 33.4 million barrels is in place (2P).

But the company is producing at only one of its plants located at Kharsang in Arunachal Pradesh that accounts for a bulk of its annual revenues of around $20 million.

The company expects revenue to increase significantly once production from KG Basin begins in April 2013.
The company plans to bid independently or jointly with partners for the 9th round of auctions by the government for 34 oil blocks next April.

Jubilant Energy will sell 69.3 million new shares at 77 cents each to institutional investors, it informed LSE on Monday. The management had earlier toyed with a listing in London three years ago, but decided against it, as it was ‘too early’ to take it to the market before visibility of gas opportunities, Mr Khandelwal said.

Bhartia family, which are also behind a separate contract drug manufacturing firm Jubilant Lifesciences (formerly Jubilant Organosys), will continue to own the remaining 78.2% in Jubilant Energy.

This will be the second Bhartia group firm to go public this year after Jubilant Foodworks, under which they run the India franchise for global pizza-chain Dominos. The business group has also decided to hive off the performance polymer business from Jubilant Lifesciences and list it as a separate company in the Indian stock exchange early 2011.