The divestment process of NMDC Steel – the recently demerged Chhattisgarh-based steel making unit of NMDC Ltd – is expected to pick up pace over the next few days, “once the complete commissioning happens in the next seven days of so”, Amitava Mukherjee, Chairman and Managing Director (Additional Charge) and Director (Finance), said.

NMDC is the country’s largest iron ore merchant miner and a CPSE under the Ministry of Steel.

At a post analyst earnings call, Mukherjee said, there has been substantial interest in the EoIs floated by DIPAM and some five to eight people have expressed interest at a very initial stage. He, however, did not share names.

In January, DIPAM, through its official handle on micro-blogging site X (formerly Twitter), said: “Multiple Expressions of Interest received for the strategic disinvestment of NMDC Steel (NSL). The transaction will now move to the second stage.”

An EoI is not a formal order tender. It will determine the terms of engagement and orders are awarded later. The other stages include site visits, placing financial bids, among others before the divestment process takes place. Market sources said, interested bidders include the likes of JSW, JSPL, among others.

Share purchase agreement draft is reportedly being prepared, sources said.

Adequate EOIs

“The disinvestment process is being run by DIPAM and as we know the EoIs have been called for. This is a state-of-the-art plant and obviously there is a lot of interest. But, there has been more than adequate interest in that (EoIs),” he said during the earnings call and clarified that NMDC is not privy to the names who had placed bids.

“Now that the commissioning will be done, I believe the pace (of disinvestment) will pick up. As we understand, a lot of people were looking at the commissioning first,” Mukherjee added.

Transaction advisors to the disinvestment process had told the Centre earlier that carrying out the disinvestment process post commissioning and listing of the steel would entail a better price realisation.

The Centre is looking to divest around 50.79 per cent of its 60.79 stake in the steel plant, while 10 per cent-odd will be sold to NMDC at the existing market rate.

Commissioning of Steel Plant

According to Mukherjee, full commissioning or commercial production is expected “in the next few days” after the silica content is gradually reduced to below one per cent. The management expects the process to stabilise in the next one to two weeks and the plant is expected to commence production over the next few days.

The steel plant, located at Nagarnar, in Chhattisgarh, has an annual capacity of 3.5 million tonnes (mt) per annum. The plant’s blast furnace was commissioned earlier this month and is already producing hot metal of around 3,000 tonnes per day. Coil-making should follow soon.

The blast furnace is designed to produce up to 9,500 tonne per day of hot metal. At its peak capacity, the steel facility would require around 1.5- 5 mt of iron ore and the entire requirement will be supplied by NMDC.

Company officials say, in the first 12–18 months, the target is to produce around 1 – 1.5 mt of steel and then ramp it up. Products would be premium ones and break-even will happen at 2 mt-odd.

NMDC Steel currently has a debt of ₹5,000 crore.