Rashtriya Ispat chief favours share buyback from govt

State-owned Rashtriya Ispat Nigam Limited (RINL) is in favour of paring the high equity base to make valuations more attractive, its Chairman and Managing Director P K Bishnoi said today.     

Bishnoi added the equity base of the company was Rs 5,000 crore. "It is advisable to reduce the equity base by way of share buyback from the government."     

He said the amount of buyback should be to the extent of Rs 2,000 crore spread over a period of five to seven years.     

Bishnoi explained for this, the company would have to build up reserves to meet the buyback expenses. At present, the government's holding in the company was 100 per cent.     

He said redemption of preference shares would start from 2011 and would continue till 2014-15. The preference capital base of the company stood at Rs 2,927 crore.     

On the issue of sale of shares by the government, Bishnoi said RINL was listed among the PSUs earmarked for 25 per cent disinvestment.     

He said with the new government assuming office, it was waiting for the new policy to be announced on the disinvestment issue.      Bishnoi said disinvestment would result in better corporate governance and more efficient management.