The share price of IPCL rose today after the department of disinvestment (DoD) approved the share purchase agreement relating to the company's divestment on Wednesday. The stock rose by 2.26 per cent and hit a intraday high of Rs 85.35 before ending lower at Rs 83.50.
The imminent divestment has triggered a sharp surge on the counter during the past few months. From its 52-week low of Rs 32 on September 17, 2001, the scrip soared by 175 per cent to Rs 88.20 on March 4, 2002. It came off from that high on profit-taking and settled at Rs 81.65 on March 27, 2002.
On Wednesday, the DoD approved share purchase agreement relating to the divestment of government's 26 per cent stake in IPCL. However, the divestment seems to have run into a pothole due to the issue of ONGC's current feedstock supply to IPCL at a concessional price. ONGC has an existing agreement with IPCL to supply feedstock at a concessional price till 2006. But it is seeking a revision of the pact as after the divestment it will have to deal with a private company and it is not willing to extend the same concession to the new managment, market sources said.
Currently, the government holds about 60 per cent in IPCL and has decided to offload 51 per cent equity in two phases. The government would transfer management control to the successful bidder for 26 per cent in the current fiscal and the new partner would have the right of refusal over the remaining 25 per cent equity.
