Drafting of prospectus for RINL IPO underway: minister

Preparation of draft prospectus for the initial public offering (IPO) of Rashtriya Ispat Nigam Ltd (RINL) is underway, Parliament was informed today.

"Department of Disinvestment has appointed intermediaries to the IPO and the company has appointed auditors to the IPO. The intermediaries have started the process of due diligence and preparation of draft offer documents," Steel Minister Beni Prasad Verma said in a written reply to the Lok Sabha.

The government has approved disinvestment of 10% of its holdings in RINL through an IPO. It holds 100% stake in RINL.

The share sale will not only help the government to mop up a sizeable chunk of its Rs 30,000 crore disinvestment target for the current fiscal, it will also help the company to retain its Navratna status provided it is done before mid of November this year.

RINL was granted Navratna status on November 16, 2010, subject to the condition that it would list its shares in two years from the date of acquiring the status.

"The Navratna status would stand automatically withdrawn in case the company is not listed within the prescribed time period," Verma said.

 RINL has 3.6 million tonne steel-making capacity now at its lone facility at Vizag in Andhra Pradesh. It is in the final satges of completion of its Rs 12,000 crore capacity expansion programme. Post-expansion, RINL's capacity will go up to 6.3 million tonne per annum.