Modi said that if the deal materialised it would increase the family's share in the company to 58 per cent.

Modi was speaking to mediapersons on the sidelines of a seminar organised by the Associated Chambers of Commerce and Industry of India and Modi Corp."I had submitted techno-financial proposals in January for acquiring the 44 per cent stake and will be issuing bids for the stake when the government decides on the reserve price," he said.

The 44 per cent shares have been put on the block by financial institutions which include Industrial Development Bank of India, Industrial Finance Corporation of India and ICICI. Tyre companies, like Ceat, Continental AG of Germany and JK Tyres, had earlier shown interest in buying out the 44 per cent stake. However, all the three backed out later.

Another Modi group promoter VK Modi, who along with BK Modi already holds 20 per cent in MRL, has also submitted a separate individual bid for the FI stake.

On the issue of the purchase price for the buyout, he said it will be decided after the base price was declared by the institutions. He attributed the delay in the deal to valuations of FI shares. The Government is yet to decide on the reserve price for the purpose.

Modi said that the equity would be acquired through BK Modi group's investment companies including Modi Holdings and Modi Corp.

After buying out the stake, the company will come out with 20 per cent public offering as per the guidelines of the Securities and Exchange Board of India, he said.

This is probably the first time that financial institutions, who are collectively the largest shareholders in MRL, have resorted to an open bidding route for selling their stake and have formally initiated an exercise which could possibly lead to a management change of an Indian company.

The FIs were taken to task by shareholders last month when they approached the Monopolies and Restrictive Trade Practices (MRTPC) on the issue. They alleged that FIs were acting in connivance with other tyre manufacturers.