Gic To Offload Ipcl Pie, Leg-Up For Reliance Offer

The Reliance group's open offer for acquiring an additional 20 per cent stake in Indian Petrochemicals Corporation (IPCL) received a leg-up with the General Insurance Corporation of India (GIC) deciding to offload a part of its holding. The open offer closes tomorrow.

GIC along with the Life Insurance Corporation of India (LIC) holds about 5.53 per cent stake in IPCL while the mutual funds and the Unit Trust of India hold about 9.34 per cent.

Senior GIC executives said, "GIC has decided to pare its stake in IPCL through the open offer as the price is very attractive. It entered the company at a price much lower than the open offer price of Rs 231 per share."

 

"It will however retain a small stake as the market price of the IPCL shares could appreciate in the future," they added. They were however tightlipped on the precise number of shares to be tendered in the open offer.

UTI and LIC too are expected to take part in the open offer although it is not clear to what extent. "LIC is likely to sell a part of its holding for reasons similar to that of GIC. This also represents an attractive opportunity for UTI which is keen on selling its stake in various companies and improving its liquidity position," other institutional sources said.

The IPCL scrip today opened at the Bombay Stock Exchange at Rs 133, touched an intra day high of Rs 142, fell to a low of Rs 129 and recovered to close at Rs 139.10. On the National Stock Exchange, it closed at Rs 136.25.

The Union government is the single largest shareholder in IPCL with 33.95 per cent stake followed by the Reliance group with 26 per cent.

Foreign institutional investors hold 7.31, private corporate bodies have another 7.05 per cent while the public holding in the company is 13.37 per cent. Non-resident Indians and others hold the balance 0.45 per cent.

Reliance acquired a 20 per cent stake in IPCL, at Rs 231 per share entailing an outgo of Rs 1,491 crore, when the government divested a part of its holding in May this year. It has now made the mandatory open offer for an additional 20 per cent stake under the Securities and Exchange Board of India guidelines.