The government plans to launch Rashtriya Ispat Nigam’s (RINL) initial public offering (IPO) within a fortnight, a senior official said on Wednesday.
“The RINL IPO would hit the Street on the second or the third week of July,” said Mohammad Haleem Khan, secretary, Department of Disinvestment. RINL would be the first public sector undertaking to tap the capital market this financial year. The government plans to mop up Rs 2,500 crore by divesting stake in the company.
The IPO of the state-owned steelmaker was earlier scheduled to hit the market in June.
Last week, Khan had said the disinvestment department would go ahead with the stake sale of public sector companies, without waiting for the stock market to improve further. “If we have to achieve the target of Rs 30,000 crore this financial year, we cannot wait for the market to improve beyond a point. I think the market has bottomed out,” he had said.
Last month, the RINL management had written to the steel ministry, requesting it to defer the IPO, as the morale of employees had touched a low after a fire broke out at the company's plant in Visakhapatnam plant, killing 19 people, including 12 employees. The merchant bankers for the issue, UBS Securities India and Deutsche Equities (India), had also advised the department to defer the issue till September-October, owing to the Visakhapatnam disaster.
RINL had given the draft red herring prospectus for the IPO to the Securities and Exchange Board of India on May 18. In January, the Cabinet Committee on Economic Affairs had approved the disinvestment of 10 per cent of the government's stake in the company.
If the RINL IPO doesn’t hit the market before November, its Navratna status would be at stake. The status, accorded on November 16 2010, is subject to the company being listed in two years from the date of acquiring the status.
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