RIL to hold 80% stake in Reliance Petroleum after IPO

09-Mar-06

Reliance Industries will hold 80% stake in its subsidiary Reliance Petroleum after the latter launches India's biggest initial public offer (IPO) to whip up Rs 5,500-6,000 crore by this month-end. Reliance will pump in Rs 11,250 crore as equity into the project including the proceeds from the IPO. 50% of the 1.8 billion shares will be bought by Reliance Industries, which will undertake to retain the stocks for at least three years. Of the balance 50%, 60% will be reserved for big investors. In its draft prospectus filed with market regulator Securities & Exchange Board of India, Reliance Petroleum said the company will enter into term contracts with RIL and its affiliates for crude oil procurement, marketing of products, risk management services, technical consultancy services for operations and maintenance, risk management, operational support and transportation services The parent firm Reliance Industries is also implementing the project and constructing the power and port facilities required for the Rs 27,000 crore refinery and polypropylene plant as a Special Economic Zone (SEZ) project.