The Hindu Business Line : Haldia Petrochem plans to launch IPO soon

HALDIA Petrochemicals is all geared up to go ahead with its initial public offer which is likely to hit the market sometime during the later half of the current financial year.

According to sources, the size of the IPO is likely to be in the region of Rs 500-800 crore. According to observers, this means the management is trying to cover the equity shortfall, which GAIL (India) has failed to chip in with till date.

In all likelihood, the issue will be made through the book-building process. Although the price band of the proposed issue is yet to be finalised, the company is expected to fix a decent premium, sources added.

It may be noted that the board of Haldia Petrochemicals is scheduled to meet on Tuesday and the proposed IPO, which is perhaps the largest from the eastern region in recent times, will be taken up subsequently.

It was learnt that leading merchant bankers such as JM Morgan Stanley, Kotak Mahindra, Enam, and SBI Capital Markets are already in the fray for handling the Haldia Petrochemicals IPO. Earlier, the issue was scheduled to hit the market sometime in June this year.

However, it was postponed because of the delay in the implementation of the Rs 600-crore corporate debt restructuring (CDR) package.

The management is now determined to go ahead with the issue irrespective of the implementation of the CDR.

According to the CDR package, the lenders of Haldia Petrochemicals wanted Rs 600 crore of fresh equity, of which, Rs 332 crore was supposed to be brought in by GAIL and the rest by the present promoters or through an IPO.

GAIL failed to meet the first deadline of March 31, 2004, for several reasons. It sought an extension of the deadline. Till date nothing has materialised from the GAIL end.

"It now appears that the management of Haldia Petrochemicals is ready to go ahead without GAIL. That's why they have planned such a big IPO. It will cover all the equity requirements lined out at the CDR package. Moreover, the proceeds from the public issue will also meet some of the working capital requirements," sources added.