Comments
The Government proposes to disinvest 10 per cent stake in Rashtriya Ispat Nigam Ltd (RINL) through an initial public offering (IPO).
Setting the ball rolling for the IPO, the Department of Disinvestment in the Ministry of Finance has invited request for proposals (RFPs) from merchant bankers to engage book running lead managers to handle the issue.
The Government is considering divesting 10 per cent paid-up equity capital comprising 48,89,846 shares of face value of Rs 1,000 each, out of its shareholding through a domestic IPO.
In order to make RINL shares more affordable to the investors, it is proposed that the Steel Ministry and the company would split the equity share of face value of Rs 1,000 each into share of face value of Rs 10 each before the disinvestment.
2nd largest producer
RINL is the second largest state-run steel producer and wholly-owned by the Government. RINL has a paid-up capital of Rs 7,827.32 crore as of March 31, 2011.
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.
“As it is felt that the current level of RINL's capital (equity plus preference) base is high compared to its size, a capital restructuring exercise is being undertaken,” the RFP note of Finance Ministry said.
RINL has a production capacity of 2.9 million tonnes per annum and the company had 17,829 employees as of March 31. RINL registered a sales turnover of Rs 11,517 crore for 2010-11, an eight per cent growth over previous year. For 2011-12, the company is targeting a turnover of Rs 13,600 crore, according to the MoU with the Ministry of Steel.
The Government proposes to raise some Rs 40,000 crore through disinvestment in the current financial year. The Union Cabinet has recently approved five per cent stake sale in Bharat Heavy Electricals Ltd and 10 per cent in National Building Construction Corporation. ONGC and SAIL are the other central PSUs that will see disinvestment in the current fiscal.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.