Hinduja Group lists lubricants division on BSE under Gulf Oil name

Gulf Oil Corporation, a Hinduja Group company, listed its lubricants division on stock exchanges on Thursday as Gulf Oil Lubricants India (GOIL). The listed entity will focus on the lubes business, which makes up about 80 per cent of Gulf Oil's revenue.

Existing shareholders of Gulf Oil have been allotted one share of the new listed entity for every two shares they held, according to company officials. Gulf Oil International Chairman Sanjay G. Hinduja said it would be easier for analysts and investors to evaluate the lubricants business after its listing as a separate company. GOIL will aim for double-digit growth, he said.

The newly listed company is debt free, and has about Rs 80 crore of working-capital-related debt on its books. Ravi Chawla, Managing Director, GOIL, said the company might look at acquisition opportunities given the size and scope of the lubricants business in India.

The lubricants division was started in 1993 to make and sell lubricating oil and greases. Within seven years, the division had grown to become the second-largest lubricant oil manufacturer in the private sector in India.

Any buyout would be leveraged, and the company will, when needed, use its balance sheet to take on acquisition financing, said Manish Kumar Gangwal, CFO, GOIL.

Gulf Oil, the parent company, had consolidated revenue of Rs 1,299 crore in 2013/14, up from Rs 1,264 crore the year before. The company has reserves of Rs 443.8 crore.

Shares of GOIL began trading at Rs 229 and closed at a high of Rs 240.45 on the Bombay Stock Exchange. Price discovery happened through bids before listing, officials said.

After the listing of the lubes business, Gulf Oil will keep the explosives, detonators and real estate businesses. That company has 38 acres of special economic zone land in Bangalore, where the first building has been developed, said an official. In the explosives business, the company is number two among private players and supplies to the mining and infrastructure segment.

GOIL will manage the lubricant business in India under the 'Gulf Oil' brand, which is owned by Gulf Oil International, which owns Gulf Oil assets outside the US, Spain and Portugal. The company provides downstream products and services through joint ventures, strategic alliances, licensing agreements, and distribution arrangements.