IBP average sales dip as rival outlets grow 68%

Petroleum product retailer IBP Company Ltd said its average sales per petrol pump have seen a steady decline largely because of a 68 per cent increase in the number of retail outlets in the last two years.

The company, which goes for a public issue next week, today said its average monthly sales per petrol pump in the first nine months of the current financial year stood at 157 kilolitres. This is a sharp decline from the average monthly sales of 208 kilolitres per petrol pump in 2001-02 and 180 kl per pump in 2002-03.

The average monthly sales for the company's total retail business, however, went up 15 per cent in 2002-03 compared with 2001-02. Average monthly sales for the first nine months of 2003-04 at 3.96 lakh kilolitres were also higher than the sales for the entire 2002-03, estimated at 3.74 lakh kilolitres.

The company, which gave out the figures at a press conference here as part of its roadshows for its upcoming public issue, attributed the drop in average sales per petrol pump to the addition of a number of petrol stations during the period.

An executive added later that the ambitious plans of its principal promoter, IndianOil, and that of other private players in the petroleum marketing business notwithstanding, it will expand by setting up more retail outlets.

The company had 2,079 outlets at the end of March 2003. As on date, it has increased to 2610.

Executives said IBP has a sanction of Rs 200 crore, which includes investment in new petrol stations. Said S K Khosla, executive director, IBP: "IBP's average sales per petrol pump in 2001-02 were 208 kilolitres a month against an industry average of 198 kilolitres a month.

In 2002-03, 520 new petrol stations were added. But the sales fell to 180 kl per month as against the industry average of 196 kl per month." He said in the first nine months of the current financial year, the average sales per retail outlet declined further to 157 kl per month. But Khosla added that the sales fell primarily because the company commissioned another 445 more petrol stations during the period.

The company has mentioned in its offer document that it was apprehensive it may not be able to retain its petrol pump dealers after private players and some other government companies set up petrol stations across the country.

IBP, an IndianOil subsidiary, will hit the market next week with a public issue of 5.7 million shares. The public issue is aimed at disinvesting 26 per cent stake the government owns in the company.

Khosla said the public issue of 5,758,290 equity shares will open on February 23 and remain open for bidding under the book building route until March 1.