Advisor for Haldia Petrochem shares valuation

While the state government owns around 39 per cent equity in HPL, The Chatterjee Group (TCG) has around 36 per cent in the company.

"The government will shortly appoint an advisor for valuation of the shares held by it in Haldia Petrochemicals", said a source.

He said an auction of the government's shares would then be held among the bidders and the highest price fetched would be offered to the other principal promoter, Purnendu Chatterjee's TCG as first right of refusal.

"If TCG declines to buy the shares at that price, then the shares will be given to the highest bidder," the source said.

Sources in HPL, however, expressed concerned over the timing of the move to sell stake.

"At the moment, it is becoming extremely difficult to run the company. If the government wants to make an exit at this moment, it may not be able to recover the investments made in the company", the HPL source said.

The petrochemicals industry at the moment is facing a supply glut. The high price of naphtha was adding to the woes as the company was more dependent on imports.

"We are trying to increase the supply of domestic naphtha", HPL sources said.