The Indian subsidiary of the Coca-Cola Company has informed the government that it plans to place shares privately rather than float them in an initial public offering, according to a report in the Business Standard.

Under Indian law the company is obliged to sell off part of the subsidiary, currently 100% owned by the Atlanta-based soft drinks corporation, to Indian investors. Until now, Coca-Cola has been attempting to gain an exemption or postponement.

A senior government official was quoted as saying: "The company is not required to seek the approval of the Foreign Investment Promotion Board. The private placement will be done in accordance with the Reserve Bank of India guidelines." The company has not commented on the report but an announcement is expected at the weekend.