GIPCL Rs 345 cr public float in Feb

Gujarat Industries Power Company Ltd has informed the Bombay Stock Exchange that the company is proposing to go for further issue of shares. The company intends to float public offer anytime in February 2005.

"The company intends to collect Rs 345 crore from equity for its upcoming expansion projects. The company will also generate Rs 805 crore from the debt. The estimated cost for expansion project is Rs 1,150 crore," said D N Bhatia, general manager - finance, GIPCL.

An extraordinary general meeting will be held on December 4, 2004 to get shareholders' approval for the issue. The decision will also be taken for borrowing in access of paid up share capital and free reserves and other related matters.

The company is in the process of setting up a 250 MW expansion project at Surat Lignite Power Plant (SLPP) to double its capacity to 500 MW. The estimated cost of the power plant is Rs 997.24 crore and development of the new mines will cost approximately Rs 150 crore.

The company has obtained new lignite mines in Valia near Surat. The expansion project is scheduled to be commissioned by the end of tenth Five Year Plan.

The company has not decided the value of equity share as of now. "We intend to hit the market anytime in February, 2005. We will work out an equation of price of equity shortly," said Bhatia.

"We have approached the number of financial institutions and banks to avail the fund of Rs 800 crore for expansion projects," added Bhatia.

Recently, managing director of GIPCL L Chuango had stated that with keeping in view the recent performance the company will propose equity at a premium.

Bhatia also echoed the same note saying that the scrip is doing wonderful in market and the offer will be on the basis of book building.

GIPCL has reported a profit before tax Rs 5,522 lakh for the quarter ended on September 30 compared with Rs 215 lakh for the corresponding period of the previous fiscal year.

GIPCL had appointed four merchant bankers in September. The merchant bankers are HSBC Securities Ltd, Enam Securities Ltd, Alliance Securities Ltd and Gujarat State Financial Services Ltd.

GIPCL was established in 1986 by the Gujarat Electricity Board, the Gujarat State Fertilizers and Chemicals Ltd, Gujarat Alkalis and Chemicals Ltd and the Petrofills Co-operatives Ltd with major shareholding in the company. At present, the public holds about 14 per cent stake in the company.