Rashtriya Ispat Nigam files draft prospectus for IPO

Government intends to divest 10% stake through IPO

State-run steel producer Rashtriya Ispat Nigam (RINL) has filed draft papers with Securities and Exchange Board of India (Sebi) for divestment of 10% government stake in the company. The Government of India (GoI) holds 100% stake in RINL at present. The GoI intends to sell 48.89 crore shares through IPO of RINL. The offer comprises a net offer to the public of 44 crore shares and a reservation of 4.88 crore shares for subscription by the eligible employees of the company, according to the Draft Red Herring Prospectus. The government's stake will fall to 90% after the IPO.

RINL is the second largest government-owned steel company in India, with original liquid steel production capacity of 3 million tonnes per annum (mtpa) and expanded liquid steel production capacity of 6.3 mtpa, which is currently in the advanced stages of completion, and is expected to be operational by the end of the current financial year (year ending 31 March 2015).

RINL's steel production facilities are located at a single production site in Visakhapatnam. The company sells its steel products to project users, industrial users and retailers. The customers consist mainly of companies in the construction, infrastructure, manufacturing, automobile, general engineering and fabrication sectors.

In November 2010, RINL was conferred Navratna status by the Gol, which provides the company with a considerable degree of operational and financial autonomy from the Gol.

On consolidated basis, RINL registered profit after tax (PAT) of Rs 122.37 crore on net sales of Rs 2300 crore for three months ended 30 June 2014. For the year ended 31 March 2014, RINL registered PAT of Rs 286.97 crore on net sales of Rs 11989.55 crore.

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