The Hindu Business Line : RPL expects trading in first week of May

IPO details
The issue size is 135 crore equity shares of Rs 10 each.
Reliance Industries will subscribe to 90 crore Rs 62 per share and the rest is available for the public.

MR NIKHIL MESWANI, Executive Director, Reliance Industries Ltd, flanked by Mr Kamal Nanawati (left), President, Cracker & Polymers, and Dr Shanker Adawal, President, Corporate Affairs, at a press conference in the Capital on Wednesday. — Kamal Narang

New Delhi , April 12

Reliance Petroleum Ltd (RPL), which is coming out with an initial public offering on Thursday, expects the trading of shares to begin within 20 days of the IPO closure on April 20.

The company, a start-up subsidiary of Reliance Industries Ltd (RIL), which is building Rs 27,000-crore export oriented refinery in a special economic zone in Gujarat, is likely to list on stock exchanges in the first week of May.

"We expect the trading in shares to begin between May 5-10," Mr J. Niranjan, Joint Head Investment Banker and merger and acquisition advisory of ICICI Securities, said.

RIL's share in issue size

The company is entering the capital market with a public issue of 135 crore equity shares of Rs 10 each for cash at a premium to be decided through a book-building route. The price band has been set at Rs 57-62 per share. Out of the aforesaid issue, RIL will subscribe to 90 crore shares at the issue price. Reliance Industries has made a payment towards these 90 crore equity shares at Rs 62 per share amounting to Rs 5,580 crore, the RIL Executive Director, Mr Nikhil Meswani, told media persons here on Wednesday.

Public offer

The net size of the IPO available to the public is 45 crore shares. Of this, 60 per cent is reserved for proportionate allotment to qualified institutional buyers. Another 10 per cent is being reserved for proportionate allotment to non-institutional buyers and the rest will be allotted to retail individual bidders on proportionate basis.

Retail investors will have the option of paying only Rs 16 per share on application. They can apply for a minimum 100 shares and a maximum of 1,600 shares. If the share gets listed at Rs 62, the company's market cap will be close to Rs 30,000 crore.

"The fact that our new refinery is expected to be commissioned by December 2008, ahead of new grassroot refineries coming up in South Korea, China, Singapore and two in West Asia, would give us a competitive advantage," Mr Meswani said.

New refinery's capacity

The new refinery, which together with RIL's 33-million-tonne refinery, would make Reliance the largest player in the refinery industry globally, is being built to handle heavier and more sour crude for larger margins.

Apart from a range of transport fuels of Euro-IV specifications, the new refinery would be producing petcoke as a more economic option for power generation fuel given its potential to generate 15-20 per cent higher value heat than coal, company officials said.

To power the refinery, the proposal is to set up a 450-MW power plant using petcoke, he said.

Reliance Petroleum plans to fund the proposed 5.8-lakh barrels per day refinery and the 9-lakh tonne polypropylene plant through equity of Rs 11,250 crore and debt — including syndicated loan, export credits and other long-term debt — of Rs 15,750 crore.