Indian giant Essar Energy set for London float at £1.6bn

The London Stock Exchange was today preparing to host its biggest flotation in two years after Essar Energy, one of India's largest companies, unveiled plans for a $2.5 billion (£1.6 billion) listing valuing it at $10 billion.

Essar, which owns power plants all over India and also carries out oil and gas exploration, is controlled by billionaire Indian brothers Shashi and Ravi Ruia.

If the listing realises its full value, it will surpass coal miner New World Resources's $2 billion fundraiser in May 2008.

Essar chief executive Nashad Nayyar called the listing "a fantastic opportunity for investors to participate in India's economic growth story".

"We are expanding hugely in India but chose London to host the IPO because the London Stock Exchange is one of the most liquid exchanges in the world," he said.

Essar, which has offices in Berkeley Square, plans to use all the cash raised to expand, aiming to increase its power capacity from 1200 megawatts to 11,000 megawatts in the next four years.

Nayyar said that would help it meet the "significant demand for power in India".

The firm also intends to invest in exploration and production in the oil and gas sector, mainly in India, although it also owns exploration blocks in Vietnam, Nigeria and Australia.

It is also engaged in exclusive talks to buy three refineries in the UK and Germany from Royal Dutch Shell.

The firm hired JPMorgan and Deutsche Bank as advisers on the sale.