The wheel has come a full circle. Five years ago, ICI India, the subsidiary of British chemicals major ICI plc, had made a bid to snap up 9.1 per cent stake held in Asian Paints by Atul Choksey, one of the promoters.

But the government intervened and prevented ICI from going ahead with the purchase.

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Asian Paints today returned the favour by submitting a financial bid for the government's 9.2 per cent stake in ICI India, the domestic subsidiary of UK chemical major ICI plc.

ICI plc, which holds 50.83 per cent stake in ICI India, has also submitted a bid for the stake.

Asian Paints refused to comment on the issue. The development gains significance since Asian Paints is the largest player in the Indian paints market with interest in both decorative and industrial segment.

If Asian Paints manages to corner the GoI stake, it would place a market place competitor inside ICI.

ICI is the fourth largest player in the Indian paints sector after Asian Paints, Goodlass Nerolac and Berger.

Once again, the role of government will be crucial this time as there is the issue of destabilising the management of a well-run company.

"The government is unlikely to accept Asian Paints' offer even if its bid is higher than ICI Plc as nobody would like to destabilise a company by putting a competitor in the management. Moreover, this will wrong signals to multinational companies working in India," a paint industry leader said.

The ICI India management, however, sought to downplay the development. "It is hypothetical to assume Asian Paints will buy into the company. Even if that happens, 9.2 per cent stake does not necessarily mean any representation, on the board for example," an ICI India spokesperson said.

ICI Plc had expressed its intention to acquire GoI's stake in ICI India. It had approached the government in the past but the government was not inclined to sell then.