New Delhi : After a few failed attempts in last couple of years, state-run Rashtriya Ispat on Monday filed an offer document with Sebi for an IPO through which government will sell 10 per cent of its stake in the company.
The government will offload 48,89,84,620 shares through an initial public offering (IPO), of which 35 per cent will be reserved for retail investors and 50 per cent for qualified institutional buyers.
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 had been looking to hit the 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 the RINL IPO.
The attempts hit roadblocks due to various reasons, including weak market conditions, differences with merchant bankers on the price band and a fire in which 19 people, including 12 staffers, succumbed. Sources said the IPO is likely to hit the markets by early January as the entire book building process takes about three months time.
A discount of up to 5 per cent on the offer price shall be offered to retail investors. UBS Securities and Deutsche Equities will act as merchant bankers for the issue. As per the Draft Red Herring Prospectus (DRHP) filed with Sebi, the entire issue proceeds would go the government exchequer.
The company produces a broad range of steel products, including plain wire rods, rebars, rounds, squares, structurals, billets, blooms and pig iron. It sells most of its products domestically, with Indian customers accounting for approximately 94 per cent of its sales for the three months ended June 30, 2014. Last fiscal, it had clocked around Rs 12,000 crore net sales and reported Rs 287 crore profit.
The Cabinet has already approved the stake sale of RINL. The government proposes to raise Rs 43,425 crore through disinvestment in PSUs. It has identified SAIL, ONGC, NHPC,
Coal India as a stake sale candidate in the current fiscal.