Disinvestment of the Indian Petrochemicals Corporation Limited, IPCL

Abstract

This project has been done as part of curricular requirements of the Post-graduate Programme in Management at the Indian Institute of Management, Ahmedabad, and has been credited as an Independent Course Project. The Government of India (GOI) decided to divest its stake in Indian Petrochemicals Corporation (IPCL). In this connection, we have tried to look at a hypothetical merger between Reliance Petroleum and Indian Petrochemicals. Our analysis and valuation suggest that a total divestment should be priced at around Rs 350 to Rs 400 per share of IPCL. This figure is different from that of the GoI’s panel of experts, which had priced the stake at about Rs 110 per share when control of the whole entity (IPCL) would be handed over to the strategic buyer.