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May 10, 2002 | 1450 IST
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LIC, UTI to sell IBP stake

S Ravindran & Hemangi Balse

The Life Insurance Corporation of India, General Insurance Corporation and the Unit Trust of India have decided to put up their entire holding for sale in Indian Oil Corporation's open offer for IBP, the standalone oil marketing company.

The three institutions have a combined stake of about 20.5 per cent in IBP. IOC's offer for the 20 per cent additional stake is at Rs 1551.25 per share.

GIC has already sold its shares in the open offer, while LIC and UTI have taken the final decision to sell out in the offer, which closes on May 11.

"UTI has decided to tender its shares and book profits as we entered IBP at a much lower price. The offer price is also much higher than the current market price and hence it makes further sense to sell," said DSR Murthy, executive director, UTI.

Senior institutional sources said the GIC and LIC stand too was guided by the same principle.

FI sources however said that they were not sure as to whether their entire stake would be accepted.

"Since the offer price is very attractive, most other investors will also sell out," they said.

In such a situation, under the Sebi guidelines, shares will be bought by IOC on a proportionate basis.

The IBP stock today opened on at Rs 740 on the BSE, touched an intra-day high of Rs 751 and closed at Rs 738.55.

The 52-week high of the stock is Rs 989 and low is Rs 738.55.

IOC had picked up a 33.58 per cent stake in IBP for Rs 11.54 billion as part of the big ticket divestment in February, 2002 by the government.

It has now made an open offer for another 20 per cent under Sebi guidelines. The government now holds 26 per cent stake in IBP with the balance 41.42 per cent being distributed among FIs, public and private corporate bodies.

The public holding in the company is about 14 per cent.

IBP has about 1,500 retail outlets most of them located in the eastern and northern regions of the country. It now lends further strength to the already strong marketing net work of IOC.

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