Gujarat NRE Mineral plans public issue

Gujarat NRE Mineral Resources Ltd (GNMRL) is set to offer 25 per cent of its equity to the public. The company is the controlling stake holder in India’s largest independent metallurgical coke producer, Gujarat NRE Coke Ltd (GNCL).

This is to allow the promoters to raise their holding in GNCL. With concerns rising over a possible hostile takeover of GNCL, the promoters led by chairman and managing director Arun Kumar Jagatramka have decided to raise their holding in it from 47 per cent to 51 per cent. The funds will come through an initial public offering (IPO) of GNMRL.

“We are not prepared to dilute our stake, as any steel major can mount a takeover at any time. The DRHP (Draft Red Herring Prospectus) for the IPO would be filed next month,” Jagatramka said on the sidelines of GNCL’s 23rd annual general meeting.

However, he refused to divulge the quantity that could be raised through the share sale. GNCL owns and operates two high-quality premium hard coking coal mines in Australia, through another subsidiary, Gujarat NRE Minerals Ltd, with reserves of about 560 million tonnes. The company has already invested about A$450 million to develop assets and infrastructure there.

“Over the next four years, we will look at investing another A$400 million in Australia to increase production at our mines. By 2014, we will take up our production there to six million tonnes, which will make us the fourth largest hard coking coal producer in Australia,” Jagatramka added.