The government is set to kick off its divestment drive for the current fiscal with the initial public offer of Vizag-based Rashtriya Ispat Nigam Ltd (RINL) hitting the stock markets in mid-October.
“All the requisite approvals for the IPO have been taken. The RINL issue will open on October 15 and close for subscription on October 18,” a source in the Department of Disinvestment (DoD) told Express. The government is aiming to mop-up nearly Rs 2,500 crore by divesting 10 per cent stake in RINL.
According to sources in the DoD, the steelmaker has already filed the Red Herring Prospectus (RHP) with SEBI. Officials from DoD, Ministry of Steel and RINL along with the bankers managing the IPO are likely to meet next week to take the process forward.
Besides kicking off the government’s disinvestment programme, RINL’s IPO will be also be the first public issue of any public sector undertaking in the current fiscal.
The public issue of RINL was earlier slated for launch in July but was deferred in view of subdued market conditions and a fire incident at its plant in June that claimed 19 lives. UBS Securities India and Deutsche Equities (India) Pvt Ltd are the investment bankers for the issue.
RINL has to bring out its IPO before November this year as its Navratna status, accorded on November 16, 2010, is subject to its getting listed within two years from the date of acquiring the status.
Earlier this month, the Cabinet Committee on Economic Affairs gave its nod to divesting government’s stake in Hindustan Copper Ltd, Oil India Ltd, MMTC Ltd and National Aluminium Company Limited.
While the CCEA has approved divestment of 9.33 per cent stake in MMTC Ltd through an Offer for Sale (OFS) of shares, it has given green signal to sell 10 per cent stake in Oil India Ltd. The divestment in Oil India Limited will also be done through the OFS route.
After the completion of disinvestment process, the government’s stake in MMTC and Oil India Limited will come down to 90 per cent and 68.43 per cent respectively. Government currently holds 99.33% in MMTC and 78.43 % in Oil India.