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| GSPC IPO may hit the Streets by May |
| BS Reporter / Mumbai/ Ahmedabad Mar 12, 2010, 00:48 IST |
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Gujarat State Petroleum Corporation (GSPC), the flagship company of GSPC group, involved in exploration and production (E&P), has put its public offer plans on a fast track and is aiming to hit the capital markets by May this year.
The state government is aiming to dilute about 10-15 per cent in a bid to raise about Rs 3,000-3,500 crore, said government sources close to the development.
GSPC was among India’s first companies to participate in the NELP bidding process and acquire exploration blocks across the country. The company has an international portfolio with exploration acreage in Egypt, Yemen and Australia.
Inspired by GSPC's success, even the Andhra government is also in the process of setting up an oil and gas exploration and production corporation on similar lines with ONGC as an equity partner.
“We will soon come up with an initial public offer for GSPC,” said Saurabh Patel, minister of state for energy and petrochemicals.
Patel made the announcement while talking about the budgetary demand of the Energy department. The Minister said that process regarding the IPO was under way.
The company has finalized five merchant bankers including DSP Merrill Lynch, JM Financial, Kotak group, SBI Capital and Citibank to do all the necessary work with regard to IPO.
GSPC has made a preferential allotment of 5% of GSPC at about Rs 810 a share to banks and financial institutions including State Bank of India and IDBI Bank.
“GSPC aims to submit the draft red herring prospects to SEBI early next week. The IPO is expected to hit the capital market some time before May 15,” sources said.
GSPC had originally planned a Rs 7,000 crore IPO about three years ago which was later on reduced to Rs 5,000 crore. In 2008, the company's attempt to come up with a Rs 3,500 crore IPO failed in wake of sharp decline in the benchmark prices. At that time, the company’s valuation was also impacted due to a state government requirement for profit making PSUs to part with 30 per cent of its profit before tax (PBT) for social causes.
The proceeds from the funds would be used for development of its offshore Deendayal-West field, so that it can produce about 10-12 million metric standard cubic metres a day (mmscmd) of gas by the end of 2011, sources said.
The state owned corporation has spent close to Rs 4,000 crore and plans to spend another Rs 8,000 crore for the development of the Deendayal gas field.
Chief minister Narendra Modi had announced in July 2008 that GSPC has discovered more than 20 trillion cubic feet (TCF) of gas in its exploration block in the Krishna Godavari basin, off the Andhra Pradesh coast.
In September 2009, the Directorate General of Hydrocarbon (DGH) approved the field development plan of 2 TCF reserves in KG8 in Deendayal-West of K G Basin.
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