Metal pipes manufacturer Welspun Gujarat Stahl Rohren Limited, the flagship company of the $1 bn-Welspun Group, may reportedly dilute its stake to Reliance Industries.
Reliance Industries wanted to have control in one of the steel pipe-making companies due to its larger interest in oil and gas where pipe companies have a larger role to play. The company recently has made two new natural gas discoveries in its east coast blocks in the Krishna-Godavari and Mahanadi basins. Moreover, the current global boom in oil and gas and spurt of investments in oil companies has sent pipeline demand skyrocketing across the world.
In December, ABN-AMRO picked up 0.67% stake by acquiring 900,000 equity shares of Welspun at a price of Rs. 93 each.
Meanwhile, Welspun Gujarat Stahl Rohren has earmarked an investment of Rs. 1300 crores funded through a mix of equity, overseas and domestic debt to set up a captive steel plant and plate mill. Its manufacturing facilities are located near Dahej in Gujarat.
In the global markets, Welspun Gujarat supplied pipes to oil and gas majors such as British Gas, Exxon Mobil, Shell and Saudi Aramco and in domestic front, it supplies to Gas Authority of India, Indian Oil, ONGC and Bharat Petroleum.
Read more in the DNA Money article.
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