State-owned Rashtriya Ispat Nigam Ltd (RINL) is likely to file the draft prospectus for its upcoming initial public offer (IPO) by June, a top company official said.
The share sale, in which 10 per cent stake will be sold by the government, is part of Rs 30,000 crore revenue generation through disinvestment of equities in the state-owned public sector firms for the current fiscal.
“The drafting of prospectus is on. We hope to file the DRHP (draft red herring prospectus) in next two-three months with the regulatory bodies like SEBI and Registrar of Companies,” RINL Chairman Mr A P Choudhary said.
Stating that the current focus of the company is to complete the ongoing expansion, he said that the company has time till November to come up with the IPO to fulfil the guidelines of being a Navratna firm.
“Listing of our company on the stock exchange can be done anytime before that (November) and I am confident that we will hit the market much before that period,” Mr Choudhary said, while declining to put a time frame for the proposed IPO.
The Vizag-based steel maker was granted Navratna status on November 16, 2010, subject to the condition that it would list its shares in two years from the date of acquiring the status.
Last year, the government, which owns 100 per cent stake in the company, had approved disinvestment of 10 per cent of its holdings through an IPO.
Due to poor market conditions, the company had put off its earlier plans to come up with the stake sale in January-February.
Besides, it was also looking to increase its valuation before hitting the markets as the state-owned steel maker will be adding new capacities later this month. Post commissioning of the new units, RINL will have an installed steel making capacity of 6.3 million tonnes.
The company has appointed four merchant bankers - UBS Securities, Deutsche Bank, Edelweiss Capital and IDBI Capital - as the book running lead managers (BRLMs) to manage its issue.
For the just concluded fiscal, RINL has targeted a turnover of Rs 13,600 crore, while for this financial year, it has set a target of Rs 15,000 crore. The state-owned firm is a zero-debt company and is sitting on cash reserves of Rs 5,500 crore.
As of March 31, 2011, the company has a paid up capital of Rs 7,827.32 crore. This comprises Rs 4,889.85 crore paid-up equity capital (4,88,98,462 shares of face value of Rs 1,000 each) and Rs 2,937.47 crore preference capital.