UTI, which has large exposure in IPCL, sent a team of officials to the company last week to asses its performance. It is believed that IPCL officials had told the UTI team that the company is looking forward to greater autonomy and flexibility in decision-making in order to compete with the private sector. Officials also said that they are cooperating with the government to expedite the process of divestment, sources said.

According to sources, the principal flexibility requirement for the PSU major is in reward for corporate executives, where the private sector is beating it hollow.

An IPCL executive confirmed that officials from UTI's research wing visited the company last week. He refused to divulge the details of the review meetingbut said that it is not connected with the US-64 imbroglio.

UTI, which is making an on the spot study of IPCL's performance after a gap of three years, had recently declared that it would review operations of the companies --- where its has substantial exposure, once every six months.

The meeting also discussed the ongoing recession in the petrochemical industry and how the company plans to tackle it.

It is not known whether the visit was in response to IPCL's plan of offering the stake to financial institutions. It may be recalled that the disinvestment commission has suggested a paring down of government stake in IPCL from 60 per cent to 26 per cent by roping in a strategic partner. IPCL is believed to be in favour of distributing the stake to a clutch of financial institutions.

Finance minister Yashwant Sinha had in his recent budget mentioned that the government's stake in non-strategic PSUs be reduced to 26 per cent. IPCL falls under this category.

IPCL, which was one among the mostefficiently managed PSUs, has run into rough weather following the downcycle in the petrochemical industry. Analysts said that since the petrochemical industry will be under recession till 2001, the company's chances of substantial success are slim.

However, IPCL is in the process of implementing a slew of cost-cutting measures as part of its turnaround plan. It got a reprieve recently when the Indian Oil Corporation had agreed to revised the naphtha prices down ward in line with the international standards.

UTI bought a large chunk of IPCL shares when the government went in for packaged disinvestment of PSU shares in 1992. It is believed that UTI stake in the company is close to 20 per cent.