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Govt says Reliance still in race for IPCL stake

Reliance Industries, India's biggest petrochemicals maker, has not pulled out of the race for a government stake in state-run petrochemicals firm IPCL, Divestment Minister Arun Shourie said on Wednesday.

The government is selling a 26 per cent stake along with management control in IPCL, the country's second largest petrochemicals firm in which it holds 59.75 per cent.

Two leading newspapers reported on Wednesday that two of three potential bidders including Reliance Industries were likely to withdraw from the race for IPCL.

"We have been told that they have not withdrawn but they (Reliance Industries) are upset as the gas supplier, ONGC, is now trying to bid with Indian Oil Corporation," Shourie told reporters.

Shourie did not give details.

On Tuesday, Subir Raha, chairman of Oil and Natural Gas Corporation, told a television channel the oil giant was planning to bid jointly with state-run refiner IOC for the stake in IPCL.

Indian Oil Corporation, Reliance Industries and Nirma, a detergents and chemicals maker, were earlier reported to be in the running for the IPCL stake.

IPCL's shares slid on the Reliance pullout report and ended down 3.3 per cent at Rs 91.60 on Wednesday.

Analysts said the pullout would reduce the privatisation process to a one-horse race and would not fetch the right price.

But Shourie said the government would go ahead with the stake sale even if there was only a single bidder. He said price bids for IPCL would be called on April 29.

The minister also said the government would call bidders to price their bids for a 51 per cent stake in National Fertilisers Ltd by the end of May.

He said a panel of senior ministers had approved a new fertiliser pricing policy on Wednesday, paving the way for the stake sale in NFL.

"The new pricing formula which will now go to the cabinet for approval will make NFL attractive for potential bidders," Shourie said.

The government breathed fresh life into India's painfully slow privatisation programme last year when it successfully sold stakes in several firms, notably telecoms giant VSNL, Hindustan Zinc and computer hardware and maintenance firm CMC.

It also plans to undertake strategic sales in refiners BPCL and HPCL, Shipping Corporation of India, carmaker Maruti and National Aluminium Company.

India, which has repeatedly failed to meet its privatisation targets in the past, plans to raise Rs 120 billion from sale of stakes in the current financial year which ends March 2003.

Since 1991-92, the government has managed to raise just Rs 267.38 billion out of a targeted Rs 660 billion.

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