The Hindu Business Line : Govt sets Rs 620 floor price for IBP, Rs 475 for CMC

THE Government has announced a floor price of Rs 620 per share for sale of its residual equity in IBP Company Ltd and Rs 475 a share for CMC Ltd, while declaring a 5 per cent discount for retail investors in the two entities privatised about two years ago. The public offer for both the issues will open on Monday.

The formula is akin to the one adopted in the case of Indian Petrochemical Industries Ltd (IPCL), the public issue for which opened on Friday, the Disinvestment Secretary, Mr Dhirendra Singh, told presspersons here on Saturday.

The Indian Oil Corporation (IOC) and the Tatas, who had picked up management control along with a strategic stake in IBP and CMC, respectively, have not been offered any additional equity in the public offer. In the case of IPCL, the strategic partner, Reliance Petroinvestments Ltd, was offered 5 per cent additional equity to enable it to raise its stake to 51 per cent.

The floor price for IBP at Rs 620 for a Rs 10 share is substantially lower than the Rs 1,551 per share paid by IOC to the Government for acquiring a 33.6 per cent equity stake for a total consideration of Rs 1,153.68 crore. However, in the case of CMC, the floor price is substantially higher than the Rs 197 per share paid by Tata Sons for acquiring strategic control of the computer firm.

Mr Singh said that the Government would sell its remaining 26.2 per cent equity or 39.76 lakh shares in CMC and 57.58 lakh shares in IBP comprising 26 per cent of the equity capital.

While the CMC public offer would open on February 23 and close on February 28, in the case of IBP, the issue would open on February 23 and close on March 1.

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