The government is understood to have favoured a selling price of Rs 620 per share for offloading 26 per cent residual stake in IBP which would help it mobilise about Rs 352 crore (Rs 3.52 billion) after taking into account a five per cent price discount to retail investors.

Sources associated with the process said the offer price was arrived at after a meeting of financial advisors and merchant bankers with divestment ministry officials and is subject to final approval from Finance Minister Jaswant Singh, Petroleum Minister Ram Naik and Divestment Minister Arun Shourie.

Retailers would be allocated 25 per cent of 57.58 lakh (5.76 million) shares that are offered for sale at a price of Rs 589, sources said.

The issue was oversubscribed by 2.8 times with the retail portion being fully subscribed.

The public offer constitutes government's 26 per cent residual stake in IBP after it sold 33 per cent stake to IOC in 2002.

Floor price for the issue was fixed at Rs 620 per share on a face value of Rs 10 per share.

ICICI Securities and Kotak Mahindra Capital acted as the book running lead managers to the issue.

Subscriptions for the issue remained under the dismal three per cent mark during the first three days of the offer starting February 23 and picked up following some tough talk of Divestment Minister Arun Shourie with merchant bankers.

Bids for the issue shot upto 60 per cent on the fourth day of the offer after the government said it had identified persons who were responsible for market manipulation.