The Hindu Business Line : Haldia Petro IPO likely in May

According to a senior official of the company, the board met some time in the middle of January and cleared the proposal. The draft prospectus is being readied and will be submitted to the Securities and Exchange Board of India in February.

The official said that the directors have fixed April-end or early-May as the "time-line" for the proposed IPO. The issue will be managed by Kotak Mahindra, DSP Merrill Lynch and JP Morgan Stanley and its size is likely to be Rs 650 crore.

The company is likely to offer 30 crore shares and is expected to opt for the book building route for the issue. However, the official said that the price band would be finalised only at the last moment.

As per the terms and conditions of the financial restructuring package of Haldia Petrochemicals, which was approved by the banks and financial institutions, the company was supposed to get its equity listed on the bourses by the end of 2004.

When asked about the cause for failing to meet the February deadline, he described it as "procedural delay" and added that such a delay was "normal" for a big public issue.

Another important development that has taken place recently is the approval by the board of directors for the proposal on Indian Oil Corporation (IOC) being inducted as a strategic partner in the company.

IOC will become the fourth major stakeholder in Haldia Petrochemicals after the West Bengal Government (stake held through West Bengal Industrial Development Corporation), The Chatterjee Group of Dr Purnendu Chatterjee, and the Tatas.

IOC is likely to invest Rs 150 crore in Haldia Petrochemicals for a 7.5 per cent stake. It will have representation on the company's board. This step is likely to help IOC in its forward integration plans.

HPL officials have clarified repeatedly that the delay in the IPO has nothing to do with the induction of the new partner.

However, stock market observers feel that with IOC as a partner, the issue will become even more attractive.

Another positive factor is that Haldia Petrochemicals is no longer a sick organisation.

During 2003-2004, it recorded its maiden net profit of Rs 100 crore after a successful debt restructuring exercise.

The recent upswing in the global petrochemicals market is also expected to add to the attraction of the IPO.

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Haldia Petro IPO likely in May