Govt to sell 50.79% in NMDC's steel plant at Nagarnar, invites bids

The finance ministry on Thursday invited initial bids for NMDC’s Steel Plant (NSL) at Nagarnar and offered to sell a 50.79 per cent stake in the company.

Additionally, the government shall offer 10 per cent stake in resulting company to NMDC after the strategic buyer has been identified through the bidding process and the remaining 39.21 per cent will be subscribed by the public subsequent to shares of NSL will be listed on BSE Limited (BSE) and National Stock Exchange of India Limited (NSE).

“Demerger scheme has already been approved by the Ministry of Corporate Affairs (MCA) on October 6, 2022”, said the release from DIPAM.

Department of Investment & Public Asset Management (DIPAM) on behalf of GoI will conduct the Transaction and has appointed ‘SBI Capital Markets Limited (SBICAP) as transaction advisor and ‘J. Sagar Associates’ as legal advisor.

The last date for submitting queries by interested bidders is December 29, 2022, and that for submission of bids is January 27, 2023 as per the expression of interest (EoI).

The interested bidder (IB) can submit an EoI either independently or as a Consortium Member. The consortium shall have a maximum of four members, which includes one lead member.

The interested bidder either as a Sole Bidder or collectively as a Consortium should have a Minimum Net Worth (Net Worth) of Rs 5,000 Crore on a consolidated basis. The IB shall be required to obtain all necessary approvals under applicable laws from relevant government agencies, including the Ministry of Steel.

On October 14, 2020, CCEA (Cabinet Committee of Economic Affairs) gave its ‘in-principle’ approval to the demerger of NISP ((NMDC’s integrated Steel Plant) from NMDC and strategic disinvestment of the resulting entity by selling entire stake of Government of India (GoI). After demerging from NMDC, a separate company named NSL (NMDC steel Limited) will be formed.

The plant, with a steel-making capacity of 3 million tonne per annum (mtpa), is yet to be commissioned fully. It is scheduled for completion by March 2023, and “implementation risk is lower”, the document said.

At the end of trading on November 30, 2022, on BSE, share price of NMDC was Rs. 117.65 and market capitalisation was Rs. 34,479 crores.