SYDNEY, Mar 24 (Reuters) Indian-owned Birla Copper plans to raise up to A$293 million ($207 million) in an Australian IPO to cash in on the metals boom, marking the first Indian company to list on the Sydney bourse.
Birla Copper, a unit of India's top aluminium and copper producer Hindalco Industries Ltd., will be valued at about A$600 million, at the top end of the price band of the planned initial public offering (IPO), sources familiar with the deal told Reuters on Friday.
Strong gains in resource stocks such as the world's top miner BHP Billiton Ltd./Plc and Rio Tinto Ltd./Plc, another Australian-listed mining heavyweight, have propelled Australian shares to successive record peaks this year.
''They already own some copper mines here (in Australia) and what they are doing is offering half of it to the public and using the money for expansion and to pay back debts,'' one source said.
Birla Copper in September 2003 paid A$21 million for the Mount Gordon copper mine in eastern Australia, buying it from the now-defunct Western Metals group. In January 2003, Birla bought the Nifty copper mines in far western Australia for A$79.8 million from Straits Resources Ltd.
The two mines meet one-fifth of Birla's copper concentrate needs in India, feeding its smelter at Dahej, in Gujarat.
Since Birla Copper acquired Nifty, world copper prices based on the London Metal Exchange benchmark contract have nearly quadrupled, hitting a fresh record high of $5,250 a tonne on Thursday, driven by surging demand from China, where an industrial boom has required millions of tonnes of copper imports.
The offer, managed by UBS, is slated to hit the market some time in May, and pre-marketing has commenced, the sources added. The IPO is being offered in the range of A$1.50-A$1.95 per share, with a total of up to 150 million shares, or about half of the issued capital, being sold to new investors, one source said.
At that price, the company is forecasting a price-to-earnings multiple of between 6-8 for fiscal 2007. One listed peer, Sterlite Industries Ltd. is trading at 13.53 times projected earnings, based on Reuters data.
Birla Copper is part of India's Aditya Birla group, which also controls the nation's top cement maker Grasim Industries Ltd.
It has a copper smelting and refining complex in Gujarat which was set up with an investment of US$500 million. It produces copper cathodes, copper rods, and precious metals, and can make 500,000 tonnes of copper cathode per year.
(1$=A$1.41) REUTERS SD PM1558