Financial Daily from THE HINDU group of publications
Thursday, Feb 19, 2004
Financial Daily from THE HINDU group of publications Thursday, Feb 19, 2004 |
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Petrochemicals Industry & Economy - Disinvestment Markets - Public Offer IPCL floor price set at Rs 170 per share — Retail investors to get 5 pc discount Our Bureau
New Delhi , Feb. 18 THE Government has set a floor price of Rs 170 per share for IPCL and will offer a five per cent discount to the retail investors in the forthcoming public offer for sale of 29 per cent of its residual stake in the Reliance-controlled petrochemical major, setting the stage for its launch on February 20. The lower end of the price band for the public offer, through the book-building route, has been fixed at Rs 170 per share and there is no cap in the band, the Disinvestment Secretary, Mr Dhirendra Singh, said. "However, we have clarified with SEBI and the ceiling on the price band will be fixed after the issue closes on February 27," he stated. The five per cent discount being offered to retail investors during the IPCL issue would be computed on the final offer price determined through the book-building process. Mr Singh also disclosed that Reliance would be offered the shares at a fair value of Rs 195 per share or the actual offer price, whichever was higher. Reliance has been given three days to confirm its position. If Reliance accepts the price and buys 5 per cent of the equity set aside for it during the public offer, it could hike its stake in IPCL to 51 per cent. In case, Reliance rejects the price, the five per cent equity earmarked for it would be sold through the public offer, the Disinvestment Secretary said. The Government had sold 26 per cent equity in IPCL to Reliance Industries Ltd in 2002 for Rs 1,491 crore at Rs 231 per share, after which it was left with a residual stake of about 33.95 per cent in the company. Out of the residual stake, about five per cent would be given to the employees, while the remaining 29 per cent is being sold in the market through a public offer. The Disinvestment Ministry's proposal on the floor price, the discount to retail investors and the fair value of the shares being offered to Reliance were cleared by the Finance Minister, Mr Jaswant Singh, on Wednesday.
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