The Centre is believed to have set a target of Rs 800 crore from thedivestment and the bids are expected to be substantially higher than thecurrent market price of Rs 118, merchant banking sources said. Sources saidthat the bidders will go for an open offer of another 20 per cent for theminority shareholders. The entire process is expected to be completed byDecember 31.

The news of the final go-ahead for the strategic sale triggered a rally inthe IPCL scrip at major bourses on Thursday. On the Bombay Stock Exchange,the scrip registered an appreciation of 8 per cent. Financial institutionsled the buying frenzy on the BSE by purchasing around two million shares.With the Government finally deciding the schedule and zeroing in on thebidders, speculations regarding "other interested parties" have come to anaught. American major Dow Chemicals, which had submitted its "expression ofinterest" three months ago has pulled out of of the race, sources said.

Soros Chatterjee group's decision to form a consortium with Indian OIlCorporation has also generated a lot of interest. This is because of thefact that the IOC was not given permission by the Government to pitch forthe IPCL stake, despite the oil major's board approving a proposal to thiseffect. It is not known whether the Centre will opt for a open-biddingprocess for the divestment. The IMG, it is learnt, is keen on theopen-bidding process.

The sources said that a common documentation and shareholder's agreementhave already been shown to the three bidders. They have also completed thedue-diligence exercise recently by assessing the vital data and by surveyingIPCL's major units. IPCL's fortunes have begun to look up recently due toimproved market scenario in south-east Asia.

The company, driven by improved market for petrochemical products and higherproduction volumes, has posted a net profit of Rs 102.44 crore during thefirst six months ended September 30, 1999 against a loss of Rs 23.81 crorein the corresponding period last year Average sales realisation increased12.5 per cent to Rs 3,480 per mt in the first half compared with thecorresponding period last year.

IPCL during the current year has benefited from both volume as well as priceincreases. This apart, higher capacity utilisation has also resulted inbetter distribution of overheads, industry sources said.