ONGC mulls IPO for Rs 12,440 cr plant, gives 19% stake to GAIL

NEW DELHI: Oil and Natural Gas Corp (ONGC) is planning an initial public offering of its subsidiary, which is building the Rs 12,440 crore petrochemical plant at Dahej in 2011, even as it agreed to give the state gas utility GAIL India a 19 per cent stake in the mega project.

The public sector major is considering selling up to 25 per cent of the equity shares in ONGC Petro-additions Ltd (OPaL), the special purpose vehicle formed for setting up the petrochemical complex at Dahej SEZ, a senior company official said.

"The IPO will happen at least one and half years from now when there is visible activity on ground," he said.

ONGC yesterday evening "in-principal" agreed to GAIL's request for 19 per cent stake in the venture. "We had earlier agreed to give 9 per cent stake but they were asking for more. So we have in-principle agreed for giving more," he added.

GAIL Chairman and Managing Director U D Choubey met ONGC head R S Sharma yesterday evening for more stake in the plant.

ONGC will give 20-25 per cent stake to a foreign partner who is either a product offtaker or a marketer. "We are looking for someone who can sell the polymers," he said.

The oil utility holds 26 per cent stake in OPaL and five per cent is with Gujarat State Petroleum Corp (GSPC).

The petrochemical complex would be built by February 2012, the official said adding the project is being funded in 2.55:1 debt-equity ratio.