The thinking in New Delhi circles is that the Centre will offload 26 per cent of its stake in the PSU, though a final report on this is expected in early August. The Centre holds approximately 58.6 per cent of HOC's Rs 67.27-crore equity capital, while financial institutions hold around 13 per cent. The two multinationals join the growing list of players including a German multinational and ICI Plc who are apparently looking at a strategic foothold in HOC.

Industry sources say that the HOC disinvestment process is expected to more-or-less be on the lines of that of the Indian Petrochemicals Corporation andadd that the actual disinvestment, going by previous experience, is unlikely to be kicked off before the beginning of the next fiscal.

A foothold in HOC will give these MNCs a strong position in the domestic market besides improving prospects for cost-effective sourcing and backward integration. For domestic suitors, a stake in HOC will offer synergy. HOC is the market leader in nitro-aromatics (nitrobenzene, aniline, nitrochlorobenzene, nitrotoluenes, phenol and acetone) and plans to add new capacities in line with international standards, both in terms of operations and technology, to consolidate its position. The company has already announced higher quantums of production and sales during the first quarter (April-June) of 1999-2000, besides better capacity utilisation.

Production for the period rose 7 per cent to touch 56,030 MTs against 52,214 MTs, while sales increased 16 per cent to 45,221 MTs (including exports and trading) from the level of 39,012 MTs.

Three new directors on board

HOC,which has been identified as a "mini ratna", has also reconstituted its board to include three additional directors, effective January 1999.

Director of the National Chemical Laboratories Paul Ratnaswamy, chairman of the State Bank Central Recruitment Board BN Makhija and chartered accountant Ajmera have now joined the board, taking the total strength to nine. A mini-ratna status will also mean delegation of enhanced powers to the board and investment decisions of up to Rs 100 crore (earlier this limit was set at Rs 50 crore) can now be taken by the board.