Gujarat pre-empts IPCL move to seize control of port project

Indian Petrochemicals Corporation (IPCL) has quietly pumped in over Rs 45 crore in equity of Gujarat Chemicals Port Terminal (GCPTCL) over the past two years.

While the company's investment in equity was Rs 35.98 crore in 2004-05, in the previous financial year, FY03-04, it was little over Rs 10 crore, a company official said.

Interestingly, though IPCL's investment in GCPTCL has jumped by Rs 45 crore in just two years, its equity stake has remained the same at 42 per cent.

This is mainly because the remaining 58 per cent equity stakeholders in GCPTCL, various other state-owned companies, have also raised their equity investment in GCPTCL, in direct proportion to their stake, almost simultaneously.

IPCL, now under the Reliance Industries umbrella, has been keen on GCPTCL for quite some time. The petrochemical major also has perfect synergy with India's only chemicals importing terminal. Even when it was a state-owned company, IPCL had increased its stake in GCPTCL twice by acquiring equity from Gujarat Alkalies and Chemicals Limited (GACL) and Gujarat State Fertilisers and Chemicals Limited (GSFC)

IPCL was not issued equity against its 2003-04 infusion of Rs 10 crore till last year, the sources close to the Gujarat government told Business Standard.

With the infusion of IPCL and state-owned companies' funds, GCPTCL's equity base has zoomed from Rs 178 crore to Rs 288.1 crore in just two years.

IPCL's equity investment is believed to be part of GCPTCL's debt-structuring exercise.

GCPTCL has one jetty that can berth ships of 6,000 DWT to 60,000 DWT and one storage terminal with a capacity of over 3,00,000 cubic metres. The terminal may consider investment of Rs 15-20 crore for de-bottlenecking its existing facilities.

Currently, the occupancy of terminal stands at around 80 per cent. The cargo handled by the jetty stagnated at 1 million metric tonne per annum in 2004-05 and 2003-04.

Reliance and IPCL are estimated to account for around 70 per cent of the company's business. With perfect synergy, GCPTCL has always been an IPCL favourite.

Apart from physical proximity between the Dahej-based IPCL cracker and GCPTCL terminal, IPCL currently uses some of the GCPTCL facilities. Propane and naphtha storage tanks are also mainly used by IPCL "" for either its Dahej unit or Baroda unit.