RINL to go ahead with IPO plan despite damage by Hudhud: CMD

Rashtriya Ispat Nigam is ready to go ahead with its planned IPO notwithstanding the severe damage suffered due to cyclone Hudhud.
RINL Chairman and Managing Director P Madhusudan told PTI that though cyclone has hit the state-run steel maker's lone unit at Vizag more than what was "anticipated", RINL has made no request to the government for deferment of its listing.
"From our side, we do not have any problem. We have not written to DoD to defer it either. But, it is for the DoD to decide," he said when asked whether the cyclone Hudhud had derailed its IPO plan.

The IPO is slated to hit the markets by early January.
RINL's listing plan had been postponed at least three times in the past two years due to a host of reasons. The PSU last month filed an offer document with Sebi for an IPO through which government will sell 10 per cent of its stake.
Government holds 100 per cent in the Vizag-based steel maker, which is enhancing capacity to 6.3 million tonnes per annum (mtpa) by next fiscal. Post stake sale, government holding will come down to 90 per cent.

RINL is looking to hit the capital markets to retain its Navaratna status, accorded in November 2010 with the condition that it would get listed within two years. The government had been looking to garner Rs 2,500 crore through RINL stake sale.

The cyclone Hudhud has caused huge damage to RINL's shore-based plant. Though the company had shut down two of the three blast furnaces, metal drawing from the third one was yet to be finished when the cyclone hit.
The company's 8,000 tonnes a day production has come to a standstill since the cyclone hit on Sunday. Resumption of operations at the facility are not expected in less than three weeks from now.
"The impact of the cyclone was devastating. It was more than our anticipation. Production has been stopped since last Sunday. However, we are trying hard to bring normalcy into the plant as soon as possible. It may take three weeks from now," Madhusudan said.

Apart from pressing its own engineers into action, RINL has also sought help from outside experts having expertise in operating power plant and blast furnaces to resume the plant and ensure that no untoward incidence happens while starting various units, he said.
"Considering 8,000 tonnes of production a day, the loss of production will amount to Rs 525 crore; but after deducting raw material costs, actual loss may not be more than Rs 200 crore. Cost of repair would be around Rs 50 crore. So, entire loss would not exceed Rs 250 crore," he said.
Madhusudan, however, said the loss of production would be bridged with extra efforts in subsequent months of the current fiscal so that the target is achieved.

"APTRANSCO has resumed power connection to the plant. A captive power generation unit is also starting tonight. Since steel production is required to be started in phases, we hope to resume the plant in another three weeks from now," he said.