The Hindu Business Line : Numaligarh Refinery mulls Rs 800-cr IPO

NUMALIGARH Refinery Ltd (NRL) is actively considering coming out with a Rs 700-800-crore IPO. The company, a BPCL (62 per cent) subsidiary, is already discussing the issue prospects with merchant bankers. A final decision on the offering and the issue size will be taken in the next three to four months depending on the firming up of investment proposals.

The investment proposals include a city gas joint venture for supplying CNG in Assam by March 2007, setting up 510 retail outlets of NRL across the country by 2007-08, picking up 10 per cent stake in Assam gas cracker project and expansion of the refinery up to 4.5 million tonnes.

"We have already intimated the Union Ministry of Petroleum and Natural Gas and our intention to hit the capital market. Accordingly, we are in discussion with the merchant bankers too. We are extremely hopeful to take a call on IPO latest by June," an NRL official said.

The Rs 600-crore city gas project is near finalisation and NRL will enter into an MoU for setting up a joint venture with Oil India Ltd (OIL) and Assam Gas Company Ltd (AGCL), a state government undertaking, by next month.

OIL will pick up a majority of 26 per cent stake in the joint venture. NRL and AGCL will jointly hold 24 per cent, the former accounting for 19 per cent. The remaining 50 per cent equity will be offered to the financial institutions.

The joint venture will lay a new 250-km pipeline from Numaligarh to Guwahati and will use the pipeline network of AGCL in upper Assam cities like like Jorhat, Sibsagar, Dibrugarh and others. NRL is already commissioning a 260-km pipeline to source natural gas to the refinery from the OIL facility at Dhuliajan.

NRL's possible augmentation of capacity from three to 4.5 million tonnes is facing uncertainty in view of the dismal crude supply scenario in North-Eastern India. NRL, however, is hopeful that OIL will come up with a firm crude supply proposal this time. OIL, which now holds 12 per cent stake in NRL, will soon be expanding its holding to 26 per cent.

Engineers India Ltd (EIL) is currently preparing a pre-feasibility report on the capacity expansion plan. The report will be submitted by March, to be followed by a detailed feasibility report (DFR).

Having entered the retail sector this year, the company will end up with 35 outlets in Assam this year. Plans are afoot to have 125 outlets in the State in the next two years. Also, 102 locations were identified in West Bengal, Sikkim, Bihar, Chhattisgarh, Jharkhand and Orissa for setting up retail outlets in 2005-06.

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