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The initial public offering (IPO) of Rashtriya Ispat Nigam Ltd (RINL) is unlikely to hit the market soon.
There is also no clarity yet on buyback of shares by SAIL and NMDC.
The IPO is meant to divest part of Government’s equity holding in the company. The company filed the draft document on May 18 last year to offload 10 per cent Government holding. This sell-off is expected to mop up about Rs 2,500 crore.
“The RINL IPO will take some time because it is probably not the (best) time now. It needs some more time,” Steel Secretary, G Mohan Kumar, said. He was talking to reporters on the sideline of the launch workshop on up-scaling energy-efficient production in small steel units. The project has been launched in association with the Steel Ministry, United Nations Development Programme and Australian Aid.
RINL’s IPO has been deferred thrice with the latest one in October last year. On the earlier two occasions, it was deferred due to adverse market conditions, while the third time, there were differences over the issue price. The merchant bankers suggested a price below Rs 20 against the book value of Rs 22.50, but this was not acceptable to the Steel Ministry, which led to postponement.
The Steel Secretary said the Ministry had not received any intimation for buyback of shares in the two other companies that it administers – SAIL and NMDC. “Their boards have to consider this. We have not looked at it as such. The proposal has not come from the companies, they have to look at it first,” Kumar said. It may be noted that the Disinvestment Department under the Finance Ministry is looking to use the buyback route in select CPSEs to meet its disinvestment target. Among these, Coal India, SAIL and NMDC are being considered. Coal India has gone on record saying that it was willing to consider the proposal of buyback if the Government asks it to do so. SAIL is yet to react, while NMDC has appointed merchant bankers to study such a possibility.
On the selection of a full time NMDC chairman, the Steel Secretary said it was likely to happen soon. “I think there will not be much delay now,” he said. NMDC has remained without a full time chairman since 2012 and C.S Verma, the CMD of SAIL, currently handles additional charge of NMDC.
In January, the Steel Ministry had set up a five-member panel for selecting the NMDC head. The Ministry is yet to finalise its proposal based on the recommendations of the panel, which is to be sent to the Appointments Committee of the Cabinet.
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