Reliance Petroleum Ltd, which would launch its public issue on April 13, will be focusing on exporting jet fuel, diesel, gasoline and alkylates to North America and Europe.
RPL, a 100 per cent subsidiary of Reliance Industries Ltd, is a start-up company, formed to set up a greenfield petroleum refinery and polypropylene plant in a special economic zone at Jamnagar, Gujarat. The company plans to enter the capital market to part-finance the Rs 27,000 crore (Rs 270 billion) export-oriented refinery project at Jamnagar. The issue opens on April 13 with a price band of Rs 57 to Rs 62 and closes on April 20.
Addressing a press conference in connection with RPL's forthcoming public issue, G V Jagannatha Kumar, chief financial officer, Reliance Petroleum Ltd, said RPL would be exporting its products to the most demanding and profitable markets like Europe and North America.
The proposed refinery, which will have a capacity to process 580,000 barrels per stream day, has been configured to refine a variety of feedstocks including heavier and more sour crude oils and to produce high quality transport fuels and other value added petroleum products for the markets like US and Europe.
The company was trying to tap the opportunities in the outsourcing of refinery business. The global refining system was expected to witness extended demand supply mismatch, he added.
The proposed refinery and the 900,000 tonne polypropylene plant will be located adjacent to the existing refinery and petrochemicals complex of Reliance Industries. Both the plants are expected to begin commercial operations by December 2008.
RPL proposes to fund the project through equity of Rs 11,250 crore (Rs 112.5 billion) and debt (that include syndicated loan, export credits and other long term debt) of Rs 15,700 crore (Rs 157 billion).
The IPO will offer 135 crore (1.35 billion) shares. However, RPL had placed 45 crore shares through a pre-IPO placement to a number of financial institutions. The price per share for this pre-IPO allotment was Rs 60. These equity shares will have a one year lock-in period.
Reliance Industries will again acquire 90 crore (900 million) shares through the IPO, exactly the same amount to be offered to the public. This will have a three-year lock-in period.
Thus the net size of the IPO available to the public is 45 crore (450 million) shares. Retail investors will have the option of paying only Rs 16 a share on application and can apply for a minimum of 100 shares and a maximum of 1600 shares.
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