The response has been lower than Indian Rayon's announced plan to buy back 25 per cent of its oustanding equity, as part of a plan to utilise surplus cash. The company had earmarked Rs 146 crore for the purpose, but will now pay only Rs 65 crore to buy back its own shares.

Company CFO Adesh Gupta said: "Shareholders probably expect a higher return from the scrip in the medium-term which is why the response has not been that high."

The stake of the Birla family will now go up by 2.5 per cent to 24 per cent in the process. This is against the earlier plan of the Birlas to hike stake in the company to 28.7 per cent from 21.5 per cent at present.

Indian Rayon's finance committee has decided to accept all valid bids submitted by the shareholders at Rs 85 a share, despite having received some bids at a lower price. The price was arrived at through the book-building route.

"As the number of shares are being reconciled and the documents being verified by the registrar to the offer, the exact number of valid applications will be available for disclosure later," the company said.

Indian Rayon hopes to complete the process by November 4, and the final details will be revealed later in line with Sebi guidelines. DSP Merill Lynch has been appointed as the merchant banker to the offer.