This move by the industry is a bid to stall a possible backdoor entry of multinationals through the process of global tendering. This, sources said, leads to a direct violation of the government's own policy of reserving bread manufacturing for the small sector alone.

In a letter to PMO, the industry has proposed that the disinvestment of MFIL with its 14 units and 22 franchisees should be done in a `knocked down' manner by demerging of the company. This, they say, would give a level playing field to the smaller entities in the business to bid for any of the fourteen units. The industry has pointed out that the current global tendering process gives an initial advantage to multinationals against which the smaller domestic players stand no ground.

"A piece-by-piece divestment of equity will give a fair chance to small operators to acquire any of the 14 units of MFIL," industry sources said.

Heavyweights like Nestle, Britannia and Hindustan Levers are already in the fray to acquire a stake in MFIL which is considered to have one of the best production facilities in the world.

Though the government has yet to take a decision on the bids which closed last month, industry sources said that decision could only come with the next government in place. The government has decided to divest as much as 74 per cent of the equity in MFIL to a strategic partner. With this the government had appointed ANZ Grindlays as the global financial advisor for the exercise.