This will be the year of power IPOs with a total of over Rs 30,000 crore (Rs 300 billion) likely to be collected by Indian power companies, after valuations of the listed power soaring in the recent past.

Reliance Power, which is hitting the market next week with an offering of nearly Rs 12,000 crore (Rs 120 billion), will set the trend for a slew of power IPOs from other companies including Sterlite Energy (Rs 4,000-8,000 crore or Rs 40 to Rs 80 billion), JSW Energy (Rs 4,000 crore or Rs 40 billion), JP Associates (Rs 4,000 crore or Rs 40 billion) which have already announced big share offer plans.

Other groups that are evaluating similar options include Hyderabad-based GMR Group, Patel Engineering [Get Quote] and the Alps group.

If all these plans fructify, this year's power IPO collections alone will match last year's total IPO mobilisations of Rs 34,000 crore (Rs 340 billion).

Investment bankers said companies are unlocking value by hiving off their power ventures into separate companies, where big institutional investors including foreign funds and private equity firms are keen to buy equity stakes, expecting big returns. Mutual funds have also started showing interest towards the infrastructure sector, they said.

Brijesh Koshal, head of infrastructure practice, Enam Securities, said companies are getting valued close to their production stage, which may be 4-5 years away. "Once investors trust the promoters, they are willing to value projects close to commercial productions. Power is going to be deficit in the country for the next 10 years, and the market is paying today for future expectations, irrespective of immediate returns," he said.

According to the Central Electricity Authority, the government has set a target of adding 78,577 mw generation capacity in the Five-year Plan ending March 2012 from 132,330 mw at the end of March 2007. Although power stocks are usually considered annuity returns stocks, analysts said that the regulated projects alone can generate about 14-17 per cent return on equity. Unregulated projects depending on the individual companies' efficiency can generate about 45-46 per cent returns.

No wonder, the BSE Power Index, which tracks the price movements of companies such as Tata Power [Get Quote], Reliance Energy [Get Quote], ABB and Siemens, has gained nearly 12 per cent in less than two months.

Analysts said several Indian companies have captive power plants. Eventually, these companies are expected to set up 'merchant power plants', which are partially regulated now. Market players anticipate that regulations may allow producers to set a merchant power project in the future.

Reliance Power � the company which has a record 28,200 mw of power generation capacity in the pipeline -- will offer its shares for sale to the public from January 15-18 at a price band of Rs 405-450 per share.

"Several companies are keenly watching this high-profile IPO. If the company lists at 75-100 percent premium, we can expect several other companies also unfolding their plans for power IPOs," said another investment banker.