The government is setting up a high-level committee to work out the modalities for selling off the government's 9.2 per cent stake in ICI India Ltd. This follows the recent Cabinet decision to divest the government's stake in the paints major.
Chemicals and fertilisers secretary, finance secretary and secretary (ID) in the industry ministry and a senior official of I-Sec, the merchant banking arm of ICICI, are expected to be on the committee. According to official sources, the ministry of chemicals and fertilisers is currently in the process of setting up the committee. It is the administrative ministry for ICI India Ltd.
The Committee will take a decision on the modus operandi _ whether to take the auction route or to come out with a public issue or to follow any other route _ to offload the government's equity in the paints and chemicals multinational subsidiary. The government's holding of 9.2 per cent equity (37 lakh shares) at the current share price of the company values around Rs 65 crore.
More From This Section
ICI India has a share capital of Rs 40.87 crore, of which ICI plc has the controlling stake of 51 per cent. Besides the government's holding of 9.2 per cent, the other major shareholders in the company are Indian financial institutions (4.6 per cent) and FIIs (8 per cent). The rest is with the public.
ICI plc, the parent company of ICI India Ltd, is reportedly interested in picking up the government stake in the company. This will enable it to consolidate its position in its Indian subsidiary.
The government has currently two nominees on the ICI India board, one from the department of industrial development and the other from the department of chemicals and fertilisers.
Significantly, even as the committee formation is underway, certain quarters within the government are pushing for a review of the divestment plan in ICI India. Their demand for review is on the ground that since the government has a `prized' stake in a multinational company, it should hold on to it as it will bring in rich dividends in terms of higher market appreciation and strategic value in future.