DISINVESTMENT IN IBP LIMITED
Government of India (GOI) finalized strategic sale of 33.58% of the IBP's equity out of Government holding of 59.58% on 5.02.2002. The total paid up equity of the company is Rs. 22.15 crore, out of which Government holds shares of Rs. 13.20 crore. The equity sold to strategic partners would be of face value Rs. 7.44 crore.
The company is engaged in the retail marketing of petroleum products, manufacture and marketing of industrial explosives and Cryo-Vessels for industrial and biological applications. Unlike other oil companies in the public sector it does not own any refining capacity and markets products of other refineries.
Based on competitive bidding, M/s. HSBC Securities and Capital Markets (India) Ltd. (HSBC) were appointed as Advisor for the transaction in December 2000 on a fee of 0.65% of the transaction value. The legal advisors were Amarchand Mangaldas A. Suresh Shroff and Co. and the Asset Valuers were M/S S.K.Godbole & Associates, Mr.A.P.Saxena, M/S Meticulous Consultants Pvt. Ltd., Mr.N.K.Chakravarty and M/S M.M.Kulkarni.
Interested investors submitted expression of interest (EoI) in February2001. The short listed parties completed the due diligence exercise and the transaction documents were agreed upon, after a number of rounds of discussions with bidders. Thereafter, based on these documents, Govt. invited financial bids from the bidders on 31.1.2002. Seven bidders, including PSUs, national and international bidders, submitted the bids.
The CCD, in its meeting on 5.2.2002 considered the recommendations of the Evaluation Committee, the IMG and CGD and approved the bids of Indian Oil Corporation for a price of Rs. 1153.68 crore i.e. Rs 1551/- per share at a P.E. ratio of 63.
Comparable PEs as on 31.01.02 is:
|HPCL ||5.8 |
|BPCL ||10.2 |
|IOC ||4.7 |