Reliance Industries is understood to have declined an offer by the government to pick up an additional five per cent equity in IPCL for raising its stake to 51 per cent as part of sale of the latter's residual equity in the erstwhile public sector undertaking.

The group feels that wider equity distribution would help in maintaining greater liquidity. Besides, greater public participation would also be in tune with government's policy on divestment.

The Divestment Development: Complete Coverage

A three-day deadline set by the government for the group to respond, expires on Saturday.

Reliance had bought 26 per cent government equity in IPCL in 2002 and subsequently acquired 20 per cent additional stake through an open offer.

Government had offered Reliance five per cent equity at Rs 195 or the offer price at the closure of the bids whichever was higher.

On Friday, the open offer received an overwhelming response with bids put in for 6.5 crore (65 million) shares, higher than the 5.94 crore (59.4 million) shares available for subscription.

Investment bankers said, at the end of the day, that investors had placed bids for 6.5 crore shares predominantly at Rs 170 per share, the floor price fixed for the issue.