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India, May 9 -- Even as the general response to public issues is fading, Gujarat State Petroleum Corporation (GSPC) is planning to hit the market with its Rs 4,000-crore initial public offering (IPO) in July. The Gujarat-based public sector company is involved in exploration and production (E&P) of oil and gas. GSPC expects to float the public issue of around 44.8 crore equity shares in around two months following regulatory clearance. The company has filed a Draft Red Herring Prospectus with the Securities and Exchange Board of India (SEBI) on March 25, 2010. "Going by the recent private placement at Rs 81 per share, the offer price is likely to be priced between Rs 85 and Rs 90," said a source close to the development. Unlike other public sector IPOs, the GSPC issue would not be a divestment by the government and the money would be used for further expansion and development of the company. "Proceeds of the issue would not be going to the government, but will be used by GSPC for exploration and production activity. This would add value to investors by way of increased share price," said an official on the condition of anonymity. The Ministry of Disinvestment has set a target to raise Rs 40,000 crore in the current year and is lining up public sector IPOs,. While the company faces risk of overcrowding and loss in retail investor interest, bankers seem confident of catching investor attention. "We are banking on our strength to reach out to retail investors. We have good fundamentals and are sure that investors will take notice of our issue," said a banking source close to the development. The company is likely to follow the precedence of giving discount over the base price for retail investors.
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