Haldia Petrochemicals eyes $30-billion expansion, may hit Street

To set up 3 units in TN, Andhra, Odisha; TCG also considering strategic partner

Haldia Petrochemicals (HPL), the flagship firm of the Purnendu Chatterjee-owned The Chatterjee Group (TCG), plans to set up one petrochemical complex each in Tamil Nadu, Andhra Pradesh, and Odisha, at a combined investment of around $30 billion.

Sources familiar with the development said the company is considering either an initial public offering (IPO) or roping in a strategic investor to partially fund the mega investment plans.

According to three sources close to the development, the company will set up three crude-to-polymer projects simultaneously at Cuddalore in Tamil Nadu, Kakinada in Andhra Pradesh, and Balasore in Odisha. Though the Odisha plans were in the pipeline earlier, it is now being clubbed with the other projects in view of cost advantages.

“We are in the planning stage. In Tamil Nadu, we have got clearance from the National Company Law Tribunal (NCLT) for Nagarjuna Oil. That will be the project that will take off first. We are yet to get commitment from Andhra Pradesh and Odisha on land and other things,” said a source.

The source said the initial cost estimate is around $10 billion per project and the company is “working on options” such as an IPO or roping in strategic partners for the project.

HPL, along with its international partner Rhone Capital, had acquired US-based Lummus Technology for $2.73 billion in July 2020. Lummus Technology is a master licensor of proprietary technologies in refining, petrochemicals, gas processing and coal gasification sectors, and a supplier of proprietary catalysts, equipment and related engineering services.

“The idea that HPL is trying is to design one and implement many, so that technology transfer cost gets distributed. Through the acquisition of Lummus, HPL already has the technology of crude to polymer and they want to capitalise it now with the three projects,” said another person aware about the development. In July, TCG had announced B Anand as the chief executive officer for its oil-to-polymer business. Anand was earlier the CEO of Nayara Energy, erstwhile Essar Oil.

HPL’s Director Subhasendu Chatterjee is monitoring the three projects. Looking at its IPO plans and also upcoming projects, the company is likely to rope in a senior executive from a global refinery major as its chief financial officer (CFO), said another source.

The Balasore project was planned near the proposed port at Subarnarekha River.

“The company expects faster growth in the polymer segment in the country at a rate of 7-8 per cent per annum. The three projects are a move to capitalise this growing market in a polymer-deficit country like India,” an official said.