New Delhi, Nov 2: ICI is weighing options to hold 9.1 per cent stake in Asian Paints if the Foreign Investment Promotion Board (FIPB) rejects the UK-based company's proposal.

ICI is seeking expert opinion from analysts and legal experts, sources said. Analysts say the stake in Asian Paints can be held by an FII till the net worth of ICI India improves, so that it can legally invest Rs 129 crore in the domestic paints major. The present regulations specify that a company can invest more than 30% of its net worth in another company.

ICI India has a net worth of Rs 261 crore with a paid-up capital of Rs 48 crore.

In case of acquisition of the 9.1 per cent stake in Asian Paints by either a foreign institutional investor (FII) or ICI India, no clearance will be required, analysts added.

The net worth of ICI India can be improved by issuing more equity shares to its parent company or by adding to its reserves, analysts added.

ICI India sources say the company, which has 60,000 shareholders, is unlikely to erode the investors' returns by issuing more equity shares to ICI Plc, which holds 51 per cent stake in the company.

In that case, the company may work out an arrangement with a, foreign financial institution till it adds approximately Rs 100 crore to its reserve.

As of now, foreign financial institutions can hold up to 30% in Asian Paints as the promoters are holding 41% and ICI has 9.1 per cent stake, FIs have 15 per cent and the remaining 35% is held by the public, analysts said. So, any foreign financial institution can acquire ICI's 9.1 per cent and pick up 20% from the floating stock, they added.

The foreign exchange brought in by ICI Plc to acquire the stake has to be repatriated in December this year in case the proposal is not approved by Foreign Investment Promotion Board.