Reliance Industries and the IOC-Soros consortium are the two players in the race for the IPCL stake. With the IPCL unions up in arms against the divestment programme, the government may not be in a position to complete the stake sale by the end of the current fiscal, sources said. In that case, the proposed divestment will get delayed by another six months since IPCL takes at least four months to publish audited accounts, the official added. Officials from Warbug Dillion Read, the global advisor to the deal, refused to comment on the issue.

In case the bidders seek for an extension of time, the controversy surrounding the IPCL deal will get a fresh twist. The IPCL divestment process has been fraught with problems since the beginning on account of the lack of clarity on the sale of Government's post-divestment stake.

The sale process also got delayed with the bidders asking the government to spell out a definite time-frame for the sale of post-divestment stake.It is believed that Dow Chemicals and Mitsubishi Corporation opted out of the fray as the government refused to give a definite time-frame for the sale of stake after the completion of the divestment process. The bidders felt that having management control with a minority stake would jeopardise their future plans.

INSIGHT :
Bids may be reconsidered

The Governments' ambiguous stand related to the sale of post-divestment stake may force the bidders to reconsider their bids. The divestment process is also being unnecessarily delayed under the IPCL workmen union's pressure. With the chances of improvement in the profitability in the current year appearing dim, it will be difficult to achieve the target of Rs 800 crore from sale of the government stake in IPCL.

-- Manish Joshi