However, with the Intron scrip quoting below par at Rs 5, there may not be many takers. HSDIC, which bought the shares at Rs 10 each in 1992, has already seen a 50 per cent erosion in the value of its investments.

HSIDC had purchased the shares at the time of the initial public offer (IPO) in 1992. At that time, it had entered into a buyback agreement with the Khoslas, the original promoters of Intron. The Khoslas were to buyback HSIDC's stake in Intron at either the issue price plus simple interest minus gross dividend or the average high/low of two months prior to the buyback. The buyback was to be at the end of five years from the start of commercial production or seven years from the date ofincorporation.

However, in 1994 the Khoslas entered into an agreement with AB Electrolux to sell 51 per cent stake. As the Swedish company was not a party to the agreement, it was not bound by the arrangement with HSIDC. The original promoters also did not stand by the buyback commitment. With AB Electrolux now hiking its stake in Intron to 71.25 per cent through the on-going Rs 16.27-crore rights issue, HSIDC's stake would have come down to 1.94 per cent. With a reduced stake and the depressed market price, it makes sense for HSIDC to offload its stake. The question, however, is whether there will be any buyers. Although HSIDC has agreed to renounce its rights entitlement of 6 lakh shares in favour of AB Electrolux, it is not selling the remaining 6 lakh shares to the Swedish company. On the contrary, it has opted to sell the shares in the open market where the response may not be good.

Interestingly, IFCI, which is the third largest individual shareholder in Intron with 5 lakh shares, had also enteredinto a buy-back agreement with the Khoslas. The arrangement was consequent to the one-time settlement whereby Rs 50 lakh worth of CCCPs held by IFCI were converted into equity shares. The buy-back is slated for 2001 (three years after conversion).

Again, as AB Electrolux is not a party to the agreement it is under no obligation to honour it. And with IFCI renouncing its rights entitlement, its stake in Intron will fall to 1.62 per cent. Consequently, the financial institution may also opt for offloading its remaining shares in the company.