Tamil Nadu - Coimbatore   

CPCL might go in for IPO

Special Correspondent

Coimbatore: Chennai Petroleum Corporation Ltd (CPCL) may go in for an IPO to fund its expansion plans, its Managing Director K.K.Acharya, indicated here on Friday.

Speaking to presspersons after a customer meet, he pointed out that

the company was in the process of implementing a number of expansion projects at a total investment of about Rs. 6,000 crores. Initially the expenditure would be met through debt. At a later stage, it might take the IPO route, he added.

Merger plans

According to him, the company has no immediate plans to merge itself with Indian Oil corporation which holds a majority stake in it. Despite being an independent entity as a refiner without any marketing arm of its own, CPCL has not suffered any disadvantage because IOC is committed to marketing its products. Hence, its refinery would never be shutdown for lack of product movement.

His company also figured in the corporate plan of IOC and its entire production, barring speciality products like LAB, wax and naptha, were marketed by IOC. In such a scenario there was no problem for the company to grow.

Expansion

Detailing the expansion projects, he said of the Rs. 230 crores allotted for the seawater desalination plant, about Rs. 120 crores would be spent during the current year.

While Rs. 400 crores would be the total outlay for the current year, the planned expenditure for next year would be Rs. 900 crores.

The maximum investment would be in 2009-10 when the new Diesel Hydro Treating Unit and the Resid Upgradation project at the Manali refinery would reach a very advanced stage.

With 10 million tonne capacity the company made a net profit of Rs. 565 crores last year. Hence, the capacity addition would prove immensely beneficial.

The company was spending about Rs. 90 crores for setting up a 17.6 MW capacity windmill project which would give it at least 18 per cent return every year. The water desalination plant would help save almost an amount equal to what was spent on water/kl procured from Metro Water without any uncertainty about water supply.

Feasibility

According to Mr. Acharya, the Engineers India Ltd's feasibility study on the new refinery-cum-petrochemical project will be available by June-July and the project might cost around Rs. 30,000 crores.

The focus was petrochemicals and market demand would determine the birth of this 15 million tonnes per annum project.

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