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The consortium of mining group Sterlite Industries and Morgan Stanley has emerged as the frontrunner for the 26 per cent strategic stake in the troubled financial institution IFCI. The IFCI board, which met on Monday to select the bidder for the 26 per cent stake, considered three financial bids, and the Sterlite-Morgan Stanley consortium was said to be the only bidder that made the cut.
The other two bidders who were in the fray were Shinsei Bank-Punjab National Bank-JC Flowers and Cargill Financial Services Corporation-Texas Pacific Group. It's not clear at what price the bidders have submitted the financial bids. Certain media reports suggest that Sterlite-Morgan Stanley combine would have bid between Rs 90-100 per share. Apparently, IFCI had fixed the floor price of Rs 107. However, The Economic Times reports Sterlite-MS consortium would have bid at Rs 107, the price at which IFCI is converting debt into equity.
The other bidders Shinsei Bank, PNB and JC Flowers have bid at Rs 80-85 per share, while Cargill Finance and Texas Pacific, the third bidders, could have offered below Rs 80. IFCI is now believed to have chosen Sterlite and Morgan Stanley. The reports also said that IFCI would be choosing Sterlite-MS consortium since the other bidders have also attached too many riders, besides the lower price quotes.
The allotment of shares to the winner is likely to be completed by the end of January next year.