India's Bharat Oman Refineries will soon file for an initial public offer to raise up to Rs25 billion ($635 million), three banking sources involved in the deal said.

Bharat Oman Refineries is an equal joint venture between state-run Bharat Petroleum Corporation (BPCL) and Oman Oil Company.

The company plans to sell about 48 per cent through the public offer and a pre-IPO placement, the sources said.

"We hope to file the draft prospectus by the end of this week or early next week," one said.

Bharat Oman Refineries is building a 120,000 barrels per day (bpd) refinery at Bina in the central Indian state of Madhya Pradesh at a cost of about Rs104 billion and has tied up a debt portion of about Rs64 billion. It is expected to be commissioned by the end of next year.

Asian refiners are adding capacity to feed demand in developed nations where there has been little expansion in recent years and India hopes to become a regional refining centre.

India, Asia's third-largest oil consumer, plans to expand its refining capacity by 62 per cent to 4.82 million bpd by 2012, to take advantage of its proximity to oil sources and emerging markets.

BPCL runs a 240,000 bpd refinery in Mumbai, India's financial hub, and another 150,000 bpd refinery in Kochi in the southern state of Kerala. Its subsidiary Numaligarh Refinery runs a 60,000 bpd refinery in northeast India.

A volatile stock market has soured appetite for new offerings and property developer Emaar MGF Land and healthcare services company Wockhardt Hospitals last week lowered the indicated price bands for their IPOs.

In January, Reliance Power received bids for $190 billion for its $3 billion IPO. Analysts said the offering sucked cash from the market and contributed to a 13 per cent drop in the BSE index last month.