"A number of potential acquisitions for ACC in the cement industry were considered, the Tisco cement division was one of them," said a Tata group spokesperson reacting to reports in The Financial Express on the issue.

"As this option appeared to be beneficial to both companies, it was examined in some detail," said the spokesperson. The exercise, he said, used different assumptions of cement prices and sensitivities for different rates of inflation. "No single point figure was computed," he said.

The "very limited" objective of the TSMG report which was submitted in May 1998, he said, "was to estabish that ACC should pursue thisacquisition, and to suggest financing options in the context of ACC's other expansion and investment plans."

The Tata spokesperson claimed that the net cement realisation of Rs 1,338 per tonne, (around which the valuation had been pegged), had increased since. However, no value was given of the present NCR by the spokesperson. Analysts, however, said, that higher prices can only marginally affect NCR, which takes into account prices averaged over much longer periods.

ACC entered into negotiations with Tisco for the cement plant in October-November 1998 after the submission of the report, as reported by The Financial Express earlier. TSMG was not involved in these discussions, says the Tata spokesperson, and ACC used a more detailed and precise valuation to prepare a bid.