IBP tumbled on huge selling pressure on Friday, following the company's dismal Q3 results.

By 15:10 IST, the stock of the petroleum products retailing firm crashed by 6.01% to Rs 232.95 on the BSE, declining from its intra-day high of Rs 255.90 but recovering from its intra-day low of Rs 230. A total of 13,117 shares were traded on the counter.

The fall in the IBP scrip was purely due to dismal results of the company. Late in the afternoon, IBP announced its third quarter (ended 31 December 2002) results. It recorded a huge 98% fall in net profit to Rs 1.32 crore, compared to Rs 66.62 crore in the corresponding period of the previous year. However, total income rose by 0.12% to Rs 2,167.78 crore (Rs 21.67 billion) from Rs 2,165.18 crore (Rs 21.65 billion) in DQ 2001.

Incorporated in Rangoon in 1909 as Indo Burma Petroleum Company, it was renamed IBP Company in March 1983. It has been a government company since 1970.

In February 2002, Indian Oil Corporation acquired the 33.58% government stake in IBP at Rs 1,551 per share, at a cost of Rs 1,153.60 crore (Rs 11.53 billion). The acquisition brought down the government holding in IBP from 59.59% to 26%. IBP has about 1,500 retail outlets. It has recently approved the de-merger of its subsidiary Balmer Lawrie & Company.

Meanwhile, IOC has expressed its keenness to pick up the government's remaining 26% stake in IBP and make it a wholly-owned subsidiary. The government is yet to take a decision in this regard.

As per the share purchase agreement, IOC has a call option which allows it to buy the remaining IBP stock after three years of the recent acquisition.

Meanwhile, IOC and IBP are expected to remain as separate entities. The two companies have set up a coordination committee to explore synergies and align their businesses.

IBP is mainly engaged in the storage, marketing and distribution of petroleum products. It also has interests in the engineering and chemical sectors. The company runs a chain of 1,800 petrol stations, mainly in northern India. IOC is the largest oil refining and retailing company in India, with a 40% share of the automotive fuels market.