Mumbai: The scrips of IBP, Indian Petrochemical Corporation, Hindustan Zinc Ltd and CMC have witnessed a northward journey during the past two weeks following the government's move to sell its residual stake in these already privatised companies.

Merchant banking sources close to the development said the centre is planning to divest its residual stake in these firms through a public offer. A decision in this regard will be taken during the Cabinet Committee on Disinvestment meeting scheduled on 3 October.

The IBP scrip has appreciated over 11 per cent and closed at Rs 753.3 on Wednesday from a low of Rs 675.75 on 1 September 2003. CMC has moved up to Rs 460.75 from a low of Rs 448.9. IPCL has closed at Rs 156 while Hindustan Zinc's scrip has witnessed a jump of around of Rs 10 and closed at Rs 67.95 on the Bombay Stock Exchange.

The scrip of Videsh Sanchar Nigam, however, lost Rs 3 at Rs 117.75 on Wednesday from the earlier close of Rs 121.35. The government had sold its 45 per cent stake in VSNL in the first round of divestment to the Tata group and currently holds a residual stake of 26 per cent in the telecom company.

The government is planning to mobilise close to Rs 3,500 crore from the sale of these shares, riding on a buoyant market and strong economic fundamentals. At the current market capitalisation, the government is expected to realise Rs 1,370 crore from IPCL, Rs 182 crore from CMC, Rs 902 crore from VSNL and Rs 540 crore from Balco. Currently, Balco is an unlisted entity controlled by Sterlite Industries.

The government holds a residual stake of 49 per cent in Balco, 33.93 per cent stake in IPCL, 26 per cent each in the Tata group controlled CMC and VSNL, 26 per cent in the Indian Oil Corporation owned IBP and 49 per cent in Hindustan Zinc.

Sources familiar with the development say the centre has already sought the consent of the original buyers to go ahead with the public offering, The latter have the first right of refusal on the residual shares. The government is also planning to offer an option to the original buyers to acquire up to 5 per cent of the residual shares from the open market.

Reliance Industries has a 46-per cent stake in IPCL while Indian Oil has a 53 per cent stake in IBP. Sterlite holds 26 per cent in Hindustan Zinc and the Tata group owns 45 per cent stake in VSNL and CMC. It is learnt that Reliance, IOC and Sterlite have given their consent to sell the shares in the open market. The offering will be through a book-building process route with a fixed floor price.