Indian Oil Corporation is going to accept the Rs 150 crore (Rs 1.5 billion) investment offer in Haldia Petrochemicals Ltd without any formal agreement on management control, sources close to the development said.

The IOC board will meet by the end of November to clear the proposal.

The investment would give Indian Oil 7.5 per cent stake in HPL following the expansion of its equity base to Rs 2,000 crore (Rs 20 billion) after the proposed initial public offer in December, the source added.

The HPL board on Tuesday had offered 15 million shares of face value Rs 10 at par to IOC.

IOC had earlier said it would invest in HPL if got management control. The ministry of petroleum and natural gas was then reportedly against any oil public sector undertaking making a portfolio investment.

However, the influence of the Left parties could have led IOC to revise its stand. The Left government in West Bengal is one of the promoters of HPL.

There will be no formal agreement between the promoters of HPL and IOC on the management issue, the source said.

IOC will have to bank on informal assurances on the matter given by the government of West Bengal as it has been insisting on IOC's entry into HPL.

Tata companies are eager to sell their equity stake HPL and their share may go to IOC. Tata enterprises have already shed some 6.9 per cent stake to GoWB.

IOC was invited three years back to save HPL as it was then making huge losses. Negotiations fell through then as The Chatterjee Group, the principal promoter in HPL, declined to hand over management control against IOC's offer to buy only 26 per cent stake.

GAIL Ltd was then invited to invest in HPL but it could not obtain approval from the Public Investment Board for the Rs 332 crore (Rs 3.32 billion) investment required.

The central government then pushed the case for IOC once again. IOC's current investment will not require PIB approval as it is less than the Rs 200 crore (Rs 2 billion) limit. IOC's investment would give it a toe-hold in India's second largest petrochemical company.