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Dec 19, 2007

IFCI stake sale cancelled

[India]

The 26% stake sale in Industrial Finance Corporation of India (IFCI) has been cancelled. The leading bidders for the sale was Sterlite Industries & Morgan Stanley consortium. The price offered by the consortium was Rs. 110 while IFCI had put a lower limit of Rs. 107 per share. The conditions put by Sterlite - Morgan Stanley is believed to be the cause of IFCI calling off the sale. Management control might have been one of the major issues behind this. IFCI wanted them to be strategic investor without any management control.

Earlier IFCI was planning to convert some of its debt into equity and came up with the 26% stake sale offer. After the announcement of the stake sale IFCI's market price has risen several times in speculation of high offer price. IFCI used to trade at Rs. 10 per share level a year back. There have been other factors behind such a steep rise in its share price this year.






Source of data for chart: National Stock Exchange (NSE) of India

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