According to sources, the formal shortlisting is yet to be done. The due diligence, which started few weeks back, is expected to be completed by the end of this month. Faxed queries to L&T did not evoke any response. Sources close to the deal have put the valuation of the plant around $1200-$1300 million. Industry sources say that an Indian company is also believed to have started the due diligence.

L&T is keen to rope in a strategic partner for its demerged cement business and proposed suitors include foreign and Indian parties including Lafarge, Holderbank, Cemex, Grasim, Gujarat Ambuja and India Cements.

The due diligence will follow the demerger of the cement division, which will then enable bidders to have a final view of the assets and a final valuation. The two foreign companies are in the process of expanding their operations in India.

While Holderbank has a presence in India only as a investor in Kalyanpur Cement, Lafarge kickstarted operations by acquiring Tata Steel's split location plant at Bihar and eastern Madhya Pradesh and Raymond's cement division at Bilaspur in Madhya Pradesh for a consideration of Rs 550 crore and Rs 785 crore respectively. Currently, Lafarge has a four million-tonne capacity of cement business in India. It is also in talks with many others like Orissa Cement Ltd, Jaiprakash Industries etc to make inroads into cement plants in north and eastern India. As a part of the clause for roping in a strategic partner, L&T had made it clear that the partner should not have separate company. Following this clause, Lafarge had agreed to merge its cement business with L&T.

L&T was reported to be keen on an Indian entity as strategic partner, as it wants to have a large entity with a high installed capacity.