The Hindu Business Line : Gujarat NRE's Australian float fully subscribed

Ahmedabad June 25 The initial public offering of India NRE Minerals Ltd, the Australian flagship subsidiary of Gujarat NRE Coke Ltd, has closed on stipulated date, having been oversubscribed.

The Australian company's IPO comprised 30 million shares at A$0.50 each aggregating to A$15 million. It had opened on May 21 and closed on June 22.

Mr Arun Kumar Jagatramka, Vice-Chairman and Managing Director of the company, said here today that the issue marks the entry of Indian retail investors, perhaps for the first time on such a scale, who have overwhelmingly responded to the call to come on board the flagship in making of the NRE Group in Australia.

The Reserve Bank of India had recently allowed individual Indians to invest up to $1,00,000 in overseas-listed equity every year. The company availed itself of option to provide the Indian investors to take part in a resource play in Australia and reap the benefits of investing in a mature market, he said.

Still major holder

Gujarat NRE Coke would continue to hold more than 90 per cent stake in India NRE Minerals Ltd even after the present public offer. The issue was lead managed by BBY Ltd while Ernst and Young Transaction Advisory Services Ltd, Perth, acted as Corporate Advisors, Mr Jagatramka said.

India NRE Minerals Ltd owns and operates the NRE No. 1 colliery with proven resources of more than 300 million tons in the southern coalfields of New South Wales in Australia. It has produced high-quality coking coal catering to both the domestic and export markets. The mine re-commenced production in September 2005 producing more than six lakh tonnes of coking coal, exported to India.

The current issue has been floated to raise funds for the commencement of long wall mining supported by external technical consultants with a view towards ramping up of production from the mine from the current level of one million tonnes per annum (mtpa) to more than four mtpa.

Gujarat NRE is the largest merchant producer of low-ash metallurgical coke in India and has strategic interest in various resource plays in Australia. It was the first company to have acquired a coalmine outside India and now owns three hard-coking coalmines there. Its major interests in Australia include petroleum prospecting in the Canning Basin and prospecting for gold, iron ore, coal, magnetite and other base metals in the Tasmanian region.

India NRE has negotiated an off-take agreement with the parent company for up to one million tonnes per annum, which will give it a buffer and put a cap on marketing expenses. The parent company has so far invested over $90 million in the mines.

More Stories on : IPOs | Overseas Investments | Coke & Metalurgical Coke

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Gujarat NRE's Australian float fully subscribed

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