India’s Energy Efficiency Champion Eyes IPO After Entering U.K.

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 U.K.

EESL could launch its IPO as soon as the fourth quarter, after a planned September issue of $100 million in Masala and dollar bonds in the U.K., Managing Director Saurabh Kumar said in an interview with Bloomberg. The company doubled revenue to 14 billion rupees ($217 million) in the fiscal year ended March 31 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 percent of its shares and will have an equity value of 15 billion rupees, 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 U.K. 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.

Bond Issue

The company is already preparing for its September bond issue in the U.K., 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 pounds ($129 million) over the next three years in the U.K. toward various energy efficiency programs, according to a government email. Power, Coal and Mines Minister Piyush Goyal will formally announce plans during a May 13 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 pounds each — a third cheaper than similar products sold in stores, Kumar said. With the help of U.K. partner Cenergist Ltd., EESL plans to replace replace incandescent and halogen bulbs in social housing cooperatives with energy efficient LED lighting.

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

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