State-owned Indian Oil Corporation is "ready" to buy out the government's balance 26 per cent stake in the oil marketing company IBP and make it a 100 per cent owned subsidiary.

"The government has put an option for selling its shares in IBP. We are more than happy to buy these shares. It is up to the Centre to decide on divestment of its 26 per cent equity in the company", IOC and IBP chairman M S Ramanchandran told reporters in Mumbai Monday.

He said as per the share purchase agreement signed with the government, IOC had a call option which allowed the oil major to buy remaining IBP stock only after three years of its acquisition of the marketing company.

The government had divested its 33.58 per cent stake in Kolkata-based IBP to another public sector company, IOC, which had made an aggressive bid of Rs 1,551.10 per share for the acquisition.

On integration of IBP into the IOC fold, Ramachandran said both the companies had set up a coordination committee and are aligning their business activities like a mutual hospitality arrangement.

"IBP has closed some of its depots and shelved plans for setting up port terminals among other issues as they were not in line with IOC's business plans", the chairman added.