The Indian government-owned oil and gas explorer Gujarat Petroleum Corporation or (GSPC) plans to come out with an IPO or initial public offer sometimes by late this year to raise money in the range of $1.5 billion. The news was confirmed by the bankers involved in the deal and was later confirmed by the financial news services of Reuters.
With the recent news of Gujarat Government backed GIFT IPO and the Claris Lifesciences IPO, one more government sector oil company from Gujarat is coming out with its IPO.
GSPC IPO will be a new kid on the block. Oil prices are peaking at the lifetime highs of upto 112 $ a barrel. May be that’s what made the management think to come out with an IPO. Make hay when the sun shines.
Where will the GSPC IPO money go?
GSPC has recently found a major reserve of oil and gas in the KG Basin or Krishna Godavari (KG) basin neat the eastern coast of India, which is expected to add a major share to its oil and gas reserves. No wonder that the purpose for this IPO also mentions the same. The money raised from this IPO will be used to proportionately fund its exploration and production activities.
"GSPC is expecting a report on its KG block reserves from Gaffney Cline after a month, after which the IPO filing process will start," one source said. Gaffney, Cline & Associates is a U.S.-based international certification agency.
GSPC also owns around 38 percent stake in gas transporter Gujarat State Petronet Ltd, is the operator of the block in the KG Basin where it has made a significant gas discovery.
Though the findings belong to KG basin, GSPC holds only 80 % of the block, while the remaining belongs to Canada's Geoglobal Resources Inc and India's Jubilant Enpro which are the partners in the deal.
The book running lead managers have a list of elights in investment banking: Citibank, Merrill Lynch, JM Financial, Kotak Mahindra Capital and SBI Capital Markets.
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