Sterlite has, however, been asked by the market regulator to comply with the guidelines on preferential issues. This, according to Sebi sources, means that Sterlite needs to comply with the pricing and disclosure needs under the concerned norms before allotment of the optionally convertible redeemable preference shares. It would have to seek necessary approvals from shareholders as well.

"Sterlite, which has offered to buy out 52.03 per cent with a structured deal of Rs 221, has emerged as the clear-cut winner so far in the whole race for acquiring Indal - a race which started in February," said an FI source, who added that the three institutions - Unit Trust of India, Life Insurance Corporation, and General Insurance Corporation - would like to make a formalannouncement about the deal on Tuesday which is the last day for accepting the revised offer announced by both the companies.

Alcan's offer of Rs 175 per share has not caught the FIs' fancy as it is relatively lower and, hence, less attractive.

"In the matter of acquisition of shares of Indal, Sebi has considered the views of the merchant bankers of Sterlite and Alcan," said a Sebi release. According to Sebi, there is no ground to intervene in the matter of the pending offers and in the interest of investors, it would be appropriate that the investors themselves may be allowed to take their own decisions in respect of the two offers.

The communique further says that Sterlite's revised offer, inter alia, involves a fresh issue of capital by way of optionally convertible redeemable preference shares and therefore would be subject to Sterlite's complying with Sebi guidelines dated August 4, 1994, on preferential issue of capital by a listed company.

The three institutions, which hold over 36 per cent inIndal, have held extensive talks with both the companies to reach a sound commercial decision about the largest hostile takeover in the Indian corporate history.

The expectation that Alcan may go for a negotiated deal is also fast dying as analysts point out that time is running out for this kind of deal.

According to sources, the Canadian major is actively considering approaching the Company Law Board with a fresh list of lapses allegedly committed by Sterlite in its revised offer to Indal shareholders.

UTI, LIC and GIC officials have to meet their counterparts in the Industrial Development Bank of India last week to take a final view on the matter. Some of the complaints raised by Alcan on the Sterlite offer were that:

a) Sterlite has proceeded with an offer of preference capital to shareholders without adequate authorised capital;

b) The Sterlite board does not have the power to offer new shares in its own company to Indal shareholders when these shares have not been created yet;

c) EasternGalvanising, the Sterlite associate with which Sterlite has jointly made the takeover bid on Indal, cannot issue shares of Sterlite since these are not their own shares;

d) Sterlite does not have the authority and permission from its shareholders and the central government as required under Section 372 under the Companies Act to offer to invest in Indal's equity in excess of 30 per cent of its equity and free reserves. Alcan has also alleged that the GDR shareholders of Indal cannot avail themselves of the revised Sterlite offer as it amounts to subscribing to the company's shares which is not permissible.