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Rashtriya Ispat Nigam Limited (RINL) plans to seek the approval of the government to restructure its equity capital in the near future.
“We will put the capital restructuring proposal at the next board meeting of the company due this month. Then we will approach the government for approval,” the RINL Chairman and Managing Director, Mr P.K. Bishnoi, said here.
He said the current equity base of the company was very high at Rs 8,000 crore. No company would be comfortable having such a huge equity base, he added.
“We will like to reduce the base to Rs 1,000 crore and transfer the balance Rs 7,000 crore to reserves so that the networth remains the same,” Mr Bishnoi told reporters on the sidelines of an event today.
The company has also embarked upon an expansion plan. From the present capacity of 3 million tonnes per annum (mtpa), the plant size would go up to 20 mtpa in phases.
In the first phase, the capacity would increase to 6.3 mtpa (Rs 12,500 crore), then 7.3 mtpa (Rs 7,000 crore), 11.5 mtpa (Rs 25,000 crore) and finally 20 mtpa by 2020-21.
The company has already appointed a consultant for preparing a report for expansion up to 11.5 mtpa.
Mr Bishnoi said the company has lined up large investments for capacity expansion. Land and other related infrastructure is already available with RINL for this purpose.
Regarding the possibility of an IPO, he said RINL has been put in that category of PSUs where it can divest up to 25 per cent of its equity.
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