Mumbai: Gautam Thapar’s Rs 1,026 crore paper manufacturer Ballarpur Industries Limited (BILT) intends to list Bilt Paper Plc, a new holding company of Ballarpur International Graphic Paper Holdings B.V., on the main market of the London Stock Exchange.
The company, which reported a net profit of Rs 9.08 crore on turnover of Rs 276.45 crore for the quarter ended 31 December, will apply to the ”premium listing segment of the official list of the UK listing authority,” it said in a filing with the Bombay Stock Exchange (BSE) on Tuesday.
BILT, which is expecting to be eligible for inclusion in the FTSE 250 index, said it would raise $330 million from the sale of new shares, while the private equity investors may also sell some secondary shares in the offering
BILT, with an annual production capacity of 758,710 tonnes of paper and 250,000 tonnes of hardwood pulp as on 31 December, is the first Thapar-run Avantha group company to be listed abroad. It has increased its annual paper production capacity by nearly 90% over the last two years and plans to grow it by another 50% by the end of 2014.
BILT had a market share of 51% in the Indian blade coated market and a 24% market share in the hi-bright uncoated wood-free paper segment in India during the year ended 30 June 2010.
The maker of writing and printing paper plans to use around $170 million of the IPO proceeds to fund its capital expansion, and around $140 million to reduce the company’s long-term debt.
“Indian paper demand is expected to increase significantly throughout the next decade,” BILT Chairman R.R. Vederah said in a statement. “The proceeds from the listing will help us to meet this growth in demand.”
Paper consumption per head in India was just 8 kilos in 2009, compared with 158 kilos in the UK or 63 kilos in mainland China, according to BILT, and is forecast to grow at around 6% a year up to 2020.
The listing of at least a 25% of the company is expected to be completed in mid-April, a source close to the deal said, with a price range due during the week of 4 April.
Several Indian companies have shown interest in a London Stock Exchange listing, with Essar Energy Plc having done so in April last year.
Indian companies raised $2.24 billion on the LSE last year according to data from Dealogic Plc. BILT shares rose 5.29% in Tuesday, up from their Rs31.2 close on Monday.
Citigroup and JP Morgan are joint global coordinators and joint bookrunners of the initial public offering.
Reuters contributed to this story.