Mumbai: Turbulent market conditions have forced Indian Oil Corporation (IOC) co-promoted oil EPC firm, IOT Infrastructure and Energy Services, to rejig the timing of its Rs800 crore IPO, but the company said it is confident of launching the issue before March.
The firm, which started as a dedicated player in oil tanking services in 1998 as an equal joint venture between IOC and German company Oil Tanking GmBH, is ready with all the required permissions, but is constrained because of the choppy market conditions, IOT Infrastructure president (finance) Jatin Mavani said in Mumbai.
“We are ready from our side...but the market is very turbulent. It is very jittery, but we are confident that we will launch (the IPO) before March,” Mavani said.
However, he made it clear that the company will not compromise on valuations in order to entice investors and launch the IPO early. “We have waited for ten years and will not lower our valuation. We will wait for the market conditions to improve.”
The company had filed its draft red herring prospectus with capital markets regulator Sebi for the IPO in September which entails marginal divestment by its existing owners and issue of fresh shares. It was initially reported that the company will hit the market by January-end.
Post-IPO, IOC and the German firm’s stake in the company will drop to 37.5% each, while the general public will hold the remaining 25%, in compliance with Sebi directive on shareholding.
Over 80% of the IOT Infrastructure’s revenues come from the engineering, procurement and construction (EPC) space in the oil industry. A majority of the rest come from the terminalling service and newer divisions like catering to upstream clientele and a renewable energy business.
Proceeds of the IPO are to be used for a capital expenditure of Rs1,920 crore for setting up a facility in Paradip and Rs350 crore outlay planned for a unit in Raipur, Mavani said.
The public issue involves sale of 58.19 million fresh shares and offer for sale of 14.59 million shares by the promoters.
The stock market has been very volatile in the recent past and speculation about Reserve Bank of India (RBI) tightening its monetary stance to tame inflation is also making investors jittery. The BSE benchmark Sensex crashed by nearly 500 points on Friday to end below the psychological 20,000 mark.