Indian IPO

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Thursday, April 13, 2006

Reliance Petroleum IPO opens today for subscription

Reliance Petroleum, RPL, has entered the capital market today for subscription with a public issue of 135 crore equity shares of Rs 10 each for cash at a premium to be decided through 100% book building route.

The issue will close on Thursday, April 20, 2006. The price band has been set at Rs 57 to Rs 62 for the issue.

Reliance Industries, RIL, will subscribe to 90 crore shares at the issue price in the proposed IPO. For this purpose, RIL would be making a payment towards these 90 crore equity shares one day prior to the opening of the issue at Rs 62 per share amounting to Rs 5,580 crore (Rs 55.80 billion).

The net size of the initial public offer, IPO available to the public is 45 crore shares.

Retail investors will have the option of pay only Rs 16 per share on application. Retail investors can apply for a minimum 100 shares and a maximum of 1600 shares.

The issue is being made to part finance the Rs 27,000 crore (Rs 270 billion) export-oriented refinery being set up in a special economic zone, SEZ, at Jamnagar, Gujarat. The export-oriented refinery will have a capacity to process 5,80,000 barrels per day making it the sixth largest refinery in the world. As a part of this project, RPL is also setting up a 900,000 tonne per annum polypropylene plant.

The project is likely to go on stream by December 2008.

The book running lead managers are Citigroup Global Markets India, Deutsche Equities India Private, DSP Merrill Lynch, Enam Financial Consultants Private, HSBC Securities & Capital Markets (India) Private, ICICI Securities, JM Morgan Stanley Private, SBI Capital Markets, UBS Securities India Private and Karvy Computershare Private is the registrar to the issue.

Reliance Industries and Chevron Corporation yesterday announced the signing of an agreement for purchase of 5% equity of Reliance Petroleum by Chevron India Holdings, Singapore, a wholly owned subsidiary of Chevron Corporation for USD 300 million.

The agreement provides Chevron with the right to acquire an additional 24% of the equity stake in RPL on conclusion of the collaboration agreements between Chevron and Reliance. If Chevron acquires additional equity, this will rank as one of the largest investments from any multinational company in a single project in India. This will also be one of the largest foreign direct investments in India.


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