The Hindu Business Line : RINL board okays 25% stake sale

New Delhi, Dec. 3 The Government will soon be considering a decision to offload 25 per cent stake in public sector steel major Rashtriya Ispat Nigam Ltd (RINL), the holding company of Visakhapatnam Steel Plant.

“The Finance Ministry had sent a proposal about a year ago, to consider offloading some stake and the RINL Board has given its go ahead for the sale of 25 per cent stake in the company, of which 5 per cent would go to the employees and the remaining 20 per cent to the public,” the RINL Chairman and Managing Director, Mr P.K. Bishnoi, told Business Line.

He, however, did not give the exact amount or the time frame by when the stake sale would actually happen.

According to an official in the Steel Ministry, the proposal is being considered within the Ministry and an opinion would also be sought from the Department of Disinvestment. “Once clearances from the concerned Ministries and Departments come, a formal proposal would be placed before the Government for the final approval,” he added.

Currently, the Government owns the entire 100 per cent equity in the company. The Minister of Steel, Chemicals and Fertilisers, Mr Ram Vilas Paswan, in the past had categorically opposed any dilution of stake in any of his Ministry’s PSU.

According to Mr Bishnoi, the Government was considering disinvestment of PSUs in two ways — one where 49 per cent stake could be offloaded and another where 25 per cent stake could be diluted.

“Since it involves a decision to be taken at a high level no formal proposal has been put up before the Government. However, the Ministry feels that if there is a portion that is sold off then overall corporate governance of the company and the whole process would be done in two phases,” the official said.

He added that offloading of stake would fetch approximately Rs 4,000 crore to the Government. RINL had reported a net profit of about Rs 1,350 crore for the fiscal ended March 31, and the equity capital of the company is around Rs 5,000 crore.

RINL is also carrying out an expansion programme to increase its production capacity from the present 3 million tonnes to 6.3 million tonnes by 2010, with an investment of Rs 9,000 crore.