Essar Group to raise $600 mn via IPO in US market

The information technology (IT) services arm of steel-to-oil conglomerate Essar Group is in talks to raise $500-600 million through a US initial public offering (IPO) and stake sale to private equity (PE) firms, sources said.

"Essar's Aegis is in talks with PE investors, including US-based Warburg Pincus and General Atlantic, to raise as much as $200 million in an equity placement prior to an IPO," sources said, declining to be named as they were not authorised to speak to the media before a public announcement.

"Aegis aims to raise as much as $300-400 million in a US listing," the sources said.

This would be the second global listing from the $17-billion conglomerate after it raised $2.5 billion in London listing of its energy arm in 2010.

"The company intends to complete the fund raising procedures in the next couple of quarters," the sources added.

"Given the size and leadership position, Aegis would attract a lot of PE interest and the company is going ahead to strike a deal as a pre-cursor to the listing," said a source.

The parent of Aegis, billionaire brothers Shashi and Ravi Ruia-led Essar Group, also controls London-listed Essar Energy and has interests in steel, ports and logistics.

An Essar spokesman said, "As a policy, Essar Group would not like to comment on speculations." Warburg Pincus declined to comment, while General Atlantic did not immediately respond to an email seeking a statement.

Last month, Aegis's chief executive officer (CEO) said the company was planning to raise between $300 million and $400 million through an IPO in the US, UK or India to expand its business and research and development.

Aegis, which employs more than 55,000 people, operates in 12 countries and has more than 300 clients across banking and financial services, telecom, healthcare, travel and hospitality, consumer goods, retail, and technology, its website showed.