Mumbai: Indraprastha Gas Ltd (IGL), a leading producer, marketer and distributor of compressed natural gas (CNG) and piped natural gas for the automotive, domestic and commercial sectors, respectively, has announced that the bidding process for its initial public offer (IPO) will open on 28 November and close on 5 December 2003.

The IPO will be by way of an offer for sale by existing financial investors — IL&FS Trust Company Ltd (as trustee for AIG Indian Sectoral Equity Fund), Infrastructure Development Finance Company Ltd and UTI - India Infrastructure Fund Unit Scheme 1999 — who are jointly making an offer of 4 crore equity shares of Rs 10 each.

This offer includes a reservation of up to 3 lakh shares for permanent employees of IGL. The price band for the offering is Rs 40-48 per equity share. Based on the price band, the size of the IPO will be in the range of Rs 160-192 crore. After the IPO, the offerors will retain an aggregate shareholding of 21.4 per cent in IGL. The shares will be listed on both Bombay Stock Exchange and the National Stock Exchange. IGL is promoted by two energy sector leaders — Gail India Ltd, the largest natural gas transmission company in India, and BPCL, a leader in oil refining and marketing in India.

The company, drawing upon the gas distribution skills of Gail and the retail marketing experience of BPCL, posted a total income of Rs 309.31 crore (an increase of 156 per cent vis-à-vis the total income of Rs 120.98 crore in fiscal 2002) and earned a net profit of Rs 58.75 crore (restated figures quoted) in FY 2003.

The company has successfully implemented a natural gas distribution system and set up its supplementary network of pipelines, compressors and CNG stations under a challenging time frame of only 56 months. The company believes that its business has brought visible benefits to the NCT of Delhi, in terms of reducing its air pollution levels IGL is one of India''s first few companies to commercialise the retail distribution and marketing of CNG on a large scale, and has invested in creating its own infrastructure to achieve the same.

IGL''s infrastructure includes, inter alia, a steel pipeline network of 125 kms, an MDPE pipeline network of 240 kms and 115 CNG dispensing stations supplying gas to nearly 77,500 vehicles, 10,000 domestic consumers and about 95 commercial consumers.

The company''s business strategy focuses on maintaining its dominant market position in the NCT of Delhi and its adjoining areas by expanding its capacity and coverage of its distribution network to keep pace with the demand potential, leveraging domain expertise of its promoters and ensuring attractive pricing. The company is currently assessing the feasibility of expansion in Noida (including Greater Noida), Gurgaon and Faridabad.

The book-running lead managers for the IPO are JM Morgan Stanley, Enam Financial Consultants and Kotak Investment Banking.