Grasim, Sterlite eye Punjab Alkalies

44% stake sale likely by Sept, six in fray.

Grasim of the Aditya Birla group and Sterlite of the Vedanta group are among the six industrial houses that have expressed interest in picking up the Punjab government's 44.26 per cent stake in Punjab Alkalies & Chemicals.

Confirming this, sources in the Punjab State Industrial Development Corporation (PSIDC), the investment agency through which the Punjab government holds its stake, said the sale process was expected to be over by next month.

Buoyed by the news, the Punjab Alkalies stock hit the 20 per cent upper limit to close at Rs 96.75 in a flat market today.

Merchant bankers are keenly watching the deal as the Punjab government's decision to divest its stake in the company was announced at a time when the United Progressive Alliance-led government in Delhi has abandoned plans to sell stakes in state-run companies to strategic investors, bowing to opposition from its Communist allies.

Sources in the two companies said they had shown interest in acquiring the government's shareholding nearly two years ago, when the government had put its stake on the block.

"Since then, we have not heard from the Punjab government. We do not know the status of our expression of interest," an executive told Business Standard.

In addition to the PSIDC's 44.26 per cent stake, Unit Trust of India holds a nearly 6 per cent stake.

A source in the PSIDC admitted that the government took a long time to decide on the sale.

"We will expedite the process. The Punjab government has prepared the draft and all those who have expressed interest will be invited to submit their bids, possibly in the next week. After the divestment, the board of the company will be reconstructed," the source said.

Punjab Finance Minister Surinder Singla told TV channel NDTV Profit that six companies had expressed interest in the company, reports Reuters.

"Now the business sentiment is very high. We want to make some money out of it," he said.

An official, who declined to be identified, has been quoted as saying that "everything should be over by the end of September".

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SELL-OFF GETS A LEG UP

THE PUNJAB government had announced its plan to sell 44.26% in Punjab Alkalies two years ago

THE SALE process is expected to be over by next month

THE SELL-OFF decision comes at a time when the Centre has abandoned plans to sell stakes in state-run companies to strategic investors