Rashtriya Ispat selloff gathers momentum

Calcutta: The government has appointed merchant bankers to divest its 10 per cent stake in Rashtriya Ispat Nigam Ltd, chairman and managing director A.P. Choudhary said.

He, however, added that the divestment through initial public offering would happen only in the next fiscal.

The government is planning to sell 48,89,846 shares of RINL — a wholly owned government enterprise — having a face value of Rs 1,000 each.

In the request for proposals (RFP) from merchant bankers, the government said RINL’s capital base was very high compared with the size of the company and hence it had undertaken the capital restructuring exercise.

RINL’s paid-up capital as of March 31, 2011 stood at Rs 7,827.32 crore, of which equity capital comprised Rs 4,889.85 crore (4,88,98,462 shares having face value of Rs 1,000 each) and preference capital, Rs 2,937.47 crore.

The shares will be split before the IPO. The stock-split coupled with capital restructuring may change the number of shares on offer in the IPO.

The government had initiated the stake sale process in June.

Meanwhile, RINL’s total production capacity is likely to increase to 6.3 million tonnes of liquid steel at the end of this fiscal. “We have completed the first phase of our expansion plan,” Choudhary said.

Jalpaiguri plant

The Rs 350-crore rail axle plant being set up at New Jalpaiguri by RINL will go on stream by 2014, Choudhary said. “We have already appointed Mecon as the consultant for the project and ordering for the plant will start in another six months.”

In January 2011, Indian Railways had signed a memorandum of understanding with RINL to manufacture forged axles for BOX N wagons to meet the growing requirement of the railways.

Following this, Indian Railways have leased 47 acres to RINL for 30 years to set up the facility, called Uttarbanga RINL Rail Karkhana at New Jalpaiguri. It is the second largest rail axle plant in the country after the Rail Wagon Factory in Bangalore.

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