Indian oil and gas giant explores $1.5bn listing on London market

Indian oil explorer Jubilant Energy is preparing to float on the London Stock Exchange in what promises to be the largest new Indian listing since mining giant Vedanta came to the market in December 2003.

The company has hired JP Morgan Cazenove to advise it on the listing, which bankers expect to value Jubilant at more than $1.5bn ([pound]750m). The listing will cement the fortune of brothers Hari and Shyam Bhartia, as well as Shyam's wife Shobhana, who runs the Hindustan Times and is arguably the most powerful woman in the Indian media. She is the daughter of Indian industrialist KK Birla, whose group controls the newspaper.

The Bhartia brothers' empire is built around Jubilant Organosys, a listed pharmaceuticals and chemicals group. Their holding company, Jubilant Corporation, also owns the Domino's Pizza franchise for South East Asia, a supermarket chain, the sole Audi dealership in South India, and represents Bell Helicopters in the country.

Much of Jubilant Energy's value comes from its 15 per cent share in the gas discovery made by Gujarat State Petroleum Corporation in the Krishna-Godavari Basin, an area in the Bay of Bengal sometimes described as India's North Sea. The Gujarat government claims GSPC's field may hold reserves of 20 trillion cubic feet of gas, which would make it the largest gas discovery yet in India. The country's directorate general of hydrocarbons puts the figure closer to five trillion. Even so, the field has drawn giants such as ExxonMobil, BP, BG Group and Shell, which are all bidding to be GSPC's partner.

GeoGlobal Resources, a Canadian oil company whose only significant asset is a 5 per cent stake in the field, is valued at $330m on the American Stock Exchange. Using the same criteria, Jubilant's stake is worth more than $1.1bn.

Jubilant also operates the 21 million barrel Kharsang oil field in Arunachal Pradesh in Northern India, has further stakes in exploration blocks in the Krishna-Godavari Basin and elsewhere in India, and holds exploration licences in Australia. The company is aiming to list on the Professional Securities Market on the LSE, and will use the proceeds to fund Jubilant Energy's growth. It is keen to come to market within months but may wait until the result of the auction of GSPC's stake is announced, establishing the field's value.

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