The Indian Petrochemicals Corporation Ltd (IPCL) has offered 1,24,10,240 equity shares to its employees at an offer price of Rs 57 per share, one-third the price (Rs 170 per share) at which the Government of India offered shares to the public.
This accounts for five per cent of IPCL's total equity. The Rs 57 per share offer price is payable as application money.
The shares to the employees will have a lock-in period of three years from the date of allocation. The offer opens on April 12 and closes on April 21.
The offer is being made as per the shareholders' agreement entered on June 4, 2002, between the President and Reliance Petroinvestment, the strategic partner.
Reliance Petroinvestment acquired a 26 per cent stake in IPCL from the government for Rs 231 per share. Subsequently, it acquired another 20 per cent through an open offer at the same price. The government disinvested a 24 per cent equity in IPCL through the book-building route.
A floor price of Rs 170 per share was fixed for the book-built offer on February 18.
With the Reliance group declining to exercise its option of acquiring an additional five per cent equity in IPCL, the offer for sale was scaled up to 7.185 crore (Rs 71.85 million) shares by offering the 1.24 crore (Rs 12.4 million) shares.
IPCL is investing Rs 350 crore (Rs 3.50 billion) to upgrade and enhance capacities of small plants in its petrochemical complexes located at Vadodara and Gandhar in Gujarat and Nagothane in Maharashtra, over the next four years.
The proposed expansion is expected to be funded through internal accruals.