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| GSPC may set IPO price band in Rs 80-90 range |
| BS Reporter / Mumbai/ Ahmedabad Apr 08, 2010, 00:25 IST |
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Gujarat state owned oil and gas explorer Gujarat State Petroleum Corporation (GSPC), which has lined up its initial public offer to the tune of Rs 3,000 crore, is considering to fix the price band in Rs 80-90 per share range, said industry sources privy to the development.
The company is aiming to go public this quarter by raising funds through book-building process.
According to the draft red herring prospectus filed by GSPC with Securities and Exchange Board of India (SEBI), the company is aiming to sell 44.80 crore share to raise Rs 3,066 crore. The government of Gujarat intends to divest 16.70% stake to the public, financial institutions and high net worth individuals.
GSPC had earlier diluted five per cent equity stake with a clutch of financial institutions and Gujarat government-owned public sector enterprises (PSEs), raising about Rs 900 crore.
The preferential allotment at about Rs 81 a share to banks and financial institutions including State Bank of India and IDBI Bank. The entities which picked up stake at Rs 81 per share included IDFC, LIC, State Bank of India, Gujarat Mineral Development Corporation (GMDC), Gujarat State Investment Limited (GSIL), Gujarat Industrial Development Board (GIDB) among others.
Keeping in view GSPC's public offer, Gujarat government is considering to do away with the earlier decision to have its profit making companies hand over 30 per cent of their profits before tax (PBT) for public welfare activity, said sources privy to the development.
A directive was issued in September 2008, wherein all profit-making PSUs were asked to contribute 30 per cent of their PBT to Gujarat Socio Economic Development Society (GSEDS), an official body, for welfare activities.
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.
L&T has won a critical offshore platform contract from Gujarat State Petroleum Corporation (GSPC) valued at Rs 1,060 crore (US$ 235 million).
The company will use IPO proceeds to funds its existing projects and repayment of loans. Around Rs 1,200 crore will be used to fund the project of Deen Dayal Block in KG basin.
The Director General of Hydrocarbon (DGH) has certified two TCF (trillion cubic feet) gas reserves in GSPC's Deendayal blocks in the KG basin.
Presently, exploration is underway in GSPC operated block KG-OSN 2001/3 located in Deendayal West field and so far 16 wells have been drilled in the area.
Commercial production of oil and gas from the field is scheduled to begin from 2012-13, according to government sources.
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