Haldia Petro plans to raise Rs 450 cr through IPO

Company also plans private placement to IOC

Haldia Petrochemicals Ltd (HPL) plans to raise at least Rs 450 crore through an initial public offer (IPO) and a private placement to Indian Oil Corporation (IOC), sources close to the development said today.

HPL has planned an IPO of 300 million shares of face value Rs 10 to fetch in excess of Rs 300 crore. The company is likely to charge a premium by offering shares through the book building route and the price band will be known before the issue opens, sources at HPL added.

The HPL board met in Mumbai today to clear the public float. It also agreed to offer 150 million share at par to IOC. The decision will be communicated to IOC shortly.

However, the development may fall short of the expectations of IOC which was clearly interested in gaining management control of HPL.

The union ministry of petroleum and natural gas, which controls IOC, is also not in favour of any oil PSU making such a portfolio investment. However, IOC's role in HPL can be seen as that of a portfolio investor only under the terms of the current offer.

HPL has appointed Kotak Mahindra, DSP Merrill Lynch and JP Morgan as book running lead managers for the IPO.

HPL is expected to file a red herring draft prospectus with Sebi in next fortnight and the issue will hit the market in early December.

The funds raised through the IPO are going to be utilised to retire debt under the guidelines laid down by the corporate debt restructuring (CDR) cell. The CDR cell has called for fresh capital infusion of Rs 600 crore in HPL.

The Chatterjee Group (TCG), the private sector promoter of HPL with the government of West Bengal and Tata Sons, has already arranged for Rs 150 crore. The entire process of debt and equity restructuring is to be completed by December 2004.

After the IPO and issue of shares to IOC, HPL's equity would swell to Rs 2,000 crore. The company has made a EBDITA of Rs 516 crore in the first six months of 2004-5, a jump of 110 per cent over the corresponding period of the last fiscal.

The company's gross turnover increased by 45 per cent to Rs 2,690 crore in the same period. On the full year basis, it is expected to post a net profit over Rs 200 crore.

Going to the public

• HPL has planned an IPO of 300 million shares of face value Rs 10
  
  
• The company is likely to charge a premium by offering shares through the book building route and the price band will be known before the issue opens
  
  
• The HPL board also agreed to offer 150 million share at par to IOC. The decision will be communicated to IOC shortly
  
  
• However, this development may fall short of the expectations of IOC which was clearly interested in gaining management control of HPL
  
  
• Private labels for two new business categories, beverages and homes, will be launched shortly
  
  
• Beverages to fall under the umbrella of Food Bazaar