Gujarat NRE Mineral to file draft papers for IPO in a month

Gujarat NRE Mineral Resources Ltd, (GNMRL), an associate of Gujarat NRE Coke Ltd, today said it will file the draft prospectus for its planned initial share sale offer in a month.

"We will file draft red herring prospectus (DRHP) in a month," Gujarat NRE Coke Ltd CMD A K Jagatramka told reporters after the company's annual general meeting.

Gujarat NRE Coke Ltd (GNCL) is the flagship entity of the Gujarat NRE group and is a leading producer of met coke in the country. GNMRL holds the controlling stake in GNCL.

According to Jagatramka, the IPO proceeding would be used to hike promoters stake in Gujarat NRE Coke Ltd.

The company did not divulge the amount it intends to mop- up through the issue. The IPO would see a dilution of 25 per cent stake by promoters in GNMRL.

"We will dilute holding in the company to raise promoters stake in GNCL to 51 per cent from around 47 per cent to prevent a possible hostile takeover," he said.

Promoters hold 90 per cent in GNMRL and post IPO it will come down to 65 per cent.

Gujarat NRE Coke is already listed on the Indian bourses. On Thursday, shares of GNCL ended 1.41 per cent lower to close at Rs 63.10 on the National Stock Exchange.

The group plans foray into oil and gas field in Australia through GNMRL and it was likely to invest about $1 million this year.

The company also planned to raise the capacity of its foreign plants, Gujarat NRE Coking Coal Ltd (GNCCL), Australian subsidiary of GNCL, which owns and operates two coal mines in Australia with combined coal resources of over 560 million tonne.

The company targeted to raise production capacity in Australia to 6 million tonne by 2014 and invest $400 million.

He said that $100 million has been invested so far and another $100 million was approved last week to increase production.

Jagatramka said work on the one million tonne coke and 60 MW greenfield power plant project in Andhra Pradesh would begin next year attracting an investment of Rs 800 crore.

Asked about coking coal price, he said the demand was sluggish due to fear in the market.

The quarterly contract price has eased to $205-209 per tonne, against $225 per tonne.

"In the next six months the price is likely to stay above $200 per tonne. This is a good price as Australian production cost is $70 per tonne.