The government on Saturday announced the floor price of Rs 620 per share for sale of residual equity in IBP and Rs 475 a share for CMC while declaring a 5 per cent discount for retail investors in the two entities that were privatised about two years ago.

The offer for the two issues would open on Monday, Divestment Secretary Dhirendra Singh told reporters after obtaining the consent of Finance Minister Jaswant Singh for the floor price.

The strategic partners, Indian Oil Corporation in the case of IBP, and Tatas in the case of CMC, have not been offered any additional equity in the public offer unlike IPCL where Reliance was offered 5 per cent additional equity to raise its stake to 51 per cent.

• The Divestment Development

The floor price for IBP at Rs 620 is substantially lower than the Rs 1,551 a share paid by IOC to government for acquiring 33.6 per cent equity for a total consideration of Rs 1,153.68 crore (Rs 11.536 billion).

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.

Singh said government would sell its remaining 26.2 per cent equity or 3.976 million shares in CMC and 5.758 million shares in IBP which comprises 26 per cent equity.

Singh said the government had decided to go for a fixed floor price, instead of a price band.

"We are following the same principle as in IPCL," he said.

The retail bidders, in both the cases, would be eligible for a five per cent differential lower price compared to the offer price established for Qualified Institutional Buyers and non-institutional bidders, through the book-building route.

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.

The CMC shares are currently priced at Rs 541.90, while the IBP scrip is at Rs 716.50 per share.

CMC and IBP are a part of the six public offers of government equity, lined up for the coming weeks.

Other public offers that are scheduled to hit the market include IPCL, which opened on Friday, Dredging Corporation of India, where government would offload 20 per cent equity and public float for 10 per cent equity in GAIL and ONGC.

The six IPOs would enable the Centre to surpass its divestment target of Rs 13,200 crore (Rs 132 billion) for the current financial year and mop up close to Rs 14,500 crore (Rs 145 billion).