UPDATE 1-India JSW Energy IPO $583 mln IPO fully subscribed

Mon Dec 7, 2009 5:57pm EST

* Fully subscribed within first half hour

* Analysts say issue fairly priced

* Well placed among peers to gain from high rates (Adds details, quotes, background)

By Pratish Narayanan

MUMBAI, Dec 7 (Reuters) - Indian power firm JSW Energy's initial public offering to raise up to $583 million was fully subscribed within half an hour of opening on Monday, underscoring appetite for new share issues in India.

By 11:35 a.m. (0605 GMT), the offering, priced at 100-115 rupees a share, was covered 1.2 times, data from the National Stock Exchange Of India showed. The offer closes on Wednesday.

The company follows IPOs from energy firms Adani Power (ADAN.BO), NHPC (NHPC.BO), Oil India (OILI.BO) and Indiabulls Power INDP.BO, which together raised about $2.8 billion since late July as they seek to expand in Asia's third-largest economy.

"JSW Energy is well placed compared to various other players, since it is expected to have operational capacity of more than 3,000 megawatts by the end of the FY 2011, thereby enjoying high merchant power rates in the short to medium term," said Rupesh Sankhe, a power-sector analyst at Angel Broking.

JSW Energy, which made a 5.8 billion rupee ($125 million) profit in the year to end-March, has current operational capacity of 995 megawatts and plans to increase total capacity to 3,140 MW by end-2010 and 11,380 MW by 2015.

Its offering would be the third-largest IPO from a power producer in India this year, behind state-run NHPC and private-sector utility Adani Power. Last year, tumbling markets saw the company pull a planned IPO to raise up to $1 billion.

The NHPC, Adani and Indiabulls Power IPOs were strongly subscribed, but this has not translated into market performance, with all three firms currently trading below their issue price.

Analysts have blamed high valuations, and have called for companies to temper prices to attract more investor interest.

"We believe that the JSW IPO is fairly priced," said Angel Broking's Sankhe.

RETAIL DISCOUNT

On Friday, the JSW Energy said it would offer anchor investors 42.3 million shares at 110 rupees each. These investors include units of Credit Suisse (CSGN.VX) and Reliance Capital (RLCP.BO).

The company is offering a discount of 5 rupees per share for retail investors, who are allotted 30 percent of Indian IPOs but have shown less enthusiasm than institutions in recent listings.

The IPO proceeds are set to be mainly used to partly fund power projects and mining ventures.

The company, part of the group that runs JSW Steel (JSTL.BO), is also involved in power transmission, and plans to foray into power distribution. It also makes turbines and generators in a joint venture with Japan's Toshiba Corp (6502.T)

JM Financial (JMSH.BO), Kotak Mahindra Capital Co (KTKM.BO), JPMorgan (JPM.N) and Morgan Stanley (MS.N) are among arrangers to the issue. (Editing by John Mair)