Financial Daily from THE HINDU group of publications
Tuesday, Nov 11, 2003
Financial Daily from THE HINDU group of publications Tuesday, Nov 11, 2003 |
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Corporate
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Announcements Markets - IPOs BPCL mulls IPO for Numaligarh Refinery Archana Chaudhary
Mumbai , Nov. 10 BHARAT Petroleum Corporation Ltd (BPCL) is considering a public issue of equity shares of its subsidiary, Numaligarh Refinery Ltd (NRL), a company source has said. The plan is to dilute part of the 61.5 per cent equity of BPCL in the company. "BPCL is looking at a public offering of NRL equity in the market to encourage investors in the North-East to invest in the refinery," the source told Business Line. He did not give details of the size of the IPO but said the issue was one of the routes being considered for funding NRL's upcoming projects. The 3-million-tonne refinery has seen an improved throughput this year, with higher availability of crude from the Ravva field. NRL will require monies to fund a number of projects such as setting up a naphtha hydrotreating plant for converting naphtha into petrol at an investment of around Rs 300-350 crore. It also plans an entry into marketing of transport fuels by setting up retail outlets (ROs); it has Government approval for 510 ROs. In addition, the company is also setting up its Rs 650-crore 165-km Numaligarh-Siliguri product pipeline for moving fuels to the target markets. The refinery will see funds flow in through another source, Oil India Ltd (OIL). The upstream major plans to increase its presence in the downstream sector by raising its stake in NRL from 12.5 per cent to 26 per cent. "With OIL picking up more stake in NRL, the refinery will be assured of secure crude oil supplies. Although availability of funds is not an issue for NRL with BPCL in the saddle, the parent is looking at high public participation in the project," the source said. NRL is referred to as the "Assam accord" refinery since it was the result of a political decision to promote industrialisation in the State. The refinery has suffered in the past because of lower crude supplies coupled with lower demand for petroleum products in the North-East.
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