IPCL came into the Reliance fold in June 2002 when the Union government, as part of its disinvestment programme, divested 26 per cent of its equity shares in favour of Reliance Petroinvestments Ltd (RPIL), a Reliance group company, for Rs 1,440 crore. RPIL acquired an additional 20 per cent equity shares through an open offer in terms of Securities and Exchange Board of India (Sebi) regulations and raised its stake to 46 per cent of the company’s equity capital. The total cost of the acquisition was Rs 2,641.45 crore, including the mandatory open offer that it made at the same price of Rs 231 a share to the public.

The market has been expecting the merger of IPCL with RIL for the last two years. “It is only natural that IPCL is merged with RIL as both have considerable synergies,” said an analyst. However, RIL shares closed 0.77 per cent lower at Rs 1289.35 in a weak stock market while IPCL closed 0.94 per cent lower at Rs 231.65.

Set up by the government on March 22, 1969, with a view to promoting and encouraging the use of plastics in India, IPCL’s business consists of polymers, synthetic fibre, fibre intermediaries, solvents, surfactants, industrial chemicals, catalysts, absorbent and polyesters.

The company operates three petrochemical complexes, a naphtha-based complex at Vadodara and one gas-based complex each at Nagothane near Mumbai and Dahej on the Narmada estuary in the Bay of Khambhat. The company also operates a catalyst manufacturing facility at Vadodara.

From a small 66,000 tonnes cracker producer, the company has come a long way and today produces over 1 million tonnes of merchant products. Six polyester companies of the Reliance group — Appollo Fibres Ltd (AFL), Central India Polyesters Ltd (CIPL), India Polyfibres Ltd (IPL), Orissa Polyfibres Ltd (OPL), Recron Synthetics Ltd (RSL) and Silvassa Industries Private Ltd (SIPL) — were amalgamated with IPCL with effect from April 1, 2005.

Earlier this month, RIL had announced that the promoter, Mukesh Ambani, would be hiking his stake in the company by 5 per cent through a Rs 17,000 crore preferential issue of warrants.