New Delhi, Feb. 18: The government has fixed a floor price of Rs 170 for the Indian Petrochemicals Corporation (IPCL) issue. Retail investors will be offered shares at a 5 per cent discount to the price discovered in the book-building process.

The public offer of the government’s holding in the petrochemicals major will open on February 20.

The decision was taken after a meeting of disinvestment and finance ministry officials today. The lower end of the price band for the public issue through the book-building route has been fixed at Rs 170 per share and there is no ceiling, divestment secretary Dhirendra Singh said.

The ministry said there will be no lock-in period for the retail investors. Reliance, which holds a 46 per cent stake in the company, has been offered an additional 5 per cent stake at Rs 195 per share.

The roadshows for the IPCL issue took off yesterday. IPCL was divested on May 18, 2002, when Reliance picked up a 26 per cent stake in it for Rs 1,490.84 crore (Rs 231 per share). This stake was later raised to 46 per cent, through an open offer.

The government wants to sell its residual 33.95 per cent stake in the company through the public offer. Of the residual stake, about 5 per cent would be given to employees, while 29 per cent would be offloaded in the market.

On the Bombay Stock Exchange today, the IPCL share closed at Rs 191.90, up 6.4 per cent on a volume of 22,08,026 shares.

IPCL was incorporated in 1969 and its fixed asset base in 2002 was Rs 8,995 crore. IPCL produces over 1 million tonnes of merchant products.

Business of IPCL comprises polymers, synthetic fibre, fibre intermediates, surfactants, commodity chemicals, catalysts and absorbents.

IPCL owns and operates three petrochemical complexes: a naphtha-based complex at Vadodara, a gas-based complex each at Nagothane near Mumbai and Dahej on Narmada estuary in Bay of Khambat. It also owns a catalyst manufacturing facility at Navi Mumbai.

After IPCL, the government will invite bids for residual equity in CMC and IBP on February 23. This would be followed by a public offer for sale of 20 per cent equity in State Trading Corporation (STC). The bids for ONGC are likely to be invited on March 3 and for Gail on March 15.

The government will finalise the price band for IBP and CMC by February 21, disinvestment minister Arun Shourie said.

He, however, clarified that the discount of 5 per cent offered in the case of IPCL for retail investors would not be a precedent for sale of equity in five other companies through the public offer route.

Asked if the government would announce only the floor price and offer similar discount as was done in the case of IPCL, Shourie said, “IPCL will not be a precedent... We will follow a case-by-case approach for every issue”.

Indian Oil Corporation and the Tatas, strategic partners in IBP and CMC, respectively, are not being offered additional stake during the residual equity sale, disinvestment ministry officials clarified. The government proposes to offload about 26 per cent stake in IBP and 26.25 per cent in CMC and has obtained all the statutory clearances and filed the offer document with the Registrar of Companies.