"The government approved the tie-up today (Wednesday). IOC will be joining TCG for the due diligence of IPCL from tomorrow," he added. TCG is an associate of the George Soros Fund Management Group of the United States.

IOC, which had failed to submit its bid before the June 30 deadline, had been scouting for a partner among four companies which had qualified to bid for the 25 per cent stake. The other three qualified bidders are US firm Dow Chemical Corp, Japan's Mitsubishi Chemical Corp and India's RIL. The Indian government plans to sell off a 25 per cent stake from its total stake of 51 per cent inIPCL, and give management control to the highest bidder. It will continue to hold 26 per cent in IPCL after the share sale. Warburg Dillon Reed is the global adviser to the Indian government on the IPCL disinvestment.

Meanwhile, the three companies in the fray for a stake in IPCL - RIL, Mitsubishi Chemicals and the Soros group - have asked the government to clearly specify when it intends making a complete exit from the PSU post-disinvestment. The bidders have, in the meantime, been told that there will be a five-year lock in period for the shares they buy from the government. The Centre will hold 26% in IPCL after selling 25% of its stake to the highest bidder. There will then be a 20% open offer made which would increase the stake of the strategic partner in IPCL to about 45 per cent.