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Divestiture in India...A sudden change of strategy

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Abstract

India's decision to sell Indian Petrochemicals Corp Ltd's (IPCL) cracker complex in Baroda to Indian Oil Corp (IOC) triggered uncertainty about the fate of the other two IPCL plants in Gandhar and Nagothane. This shift in strategy puts the government's divestment plans for its 25% stake in IPCL into disarray and necessitates another review and evaluation of the bidding process. Selling the Baroda complex separately is expected to further delay the IPCL divestment process to the 2001 financial year; the divestment was originally scheduled to be completed by 3/31/2001. Issues affecting the IPCL divestment process and the implications of IOC's acquisition of the Baroda complex for the company are discussed.

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