Having deferred twice the proposed initial public offering (IPO) of Rashtriya Ispat Nigam Limited (RINL) in the past, the government is likely to wait for some more time to list the Vizag-based steel firm in the domestic bourses.
Sources in the government said volatility in the commodity as well as in the stock markets are weighing down the plan of the government to dilute its stake in the company from 100% now.
The company, sources said, is otherwise on a strong footing to unlock its value as it has completed its capacity expansion from 3 MnT pa earlier to 6.3 MnT pa now.
“RINL is currently in consolidation phase where efforts are on for ramping up production so as to maximize returns from the installed capacities. There is no decision at present to list RINL,” said a source.
The Cabinet Committee on Economic Affairs (CCEA) had in January 2012 approved 10% divestment of the government’s through the IPO which was likely to fetch around INR 2,500 crore.
Though the process started and documentations were made to the regulators, the proposal was deferred due to poor market condition and natural calamities that hit operations of the firm.
Though the government could not meet its INR 45,500 crore disinvestment target for the current fiscal, it has set an ambitious INR 72,500 crore target for 2017-18. The target was missed mainly due to volatile market conditions.
Essentially a long product producer, Vizag-based RINL is now looking at foraying into the flat product segment with an investment of INR 22,000 crore to set up a 4 MnT pa capacity at its existing facility in Vizag.
Till December of the current fiscal, the company produced 2.9 MnT crude steel and target to produce another 1.2 MnT in the last three months. Last fiscal, it had produced 3.5 MnT. RINL has recently emerged as the top three steel players in the country as far as quality and customer satisfaction is concerned.
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