India invites bids for Neelachal Ispat Nigam; Rashtriya Ispat also to be sold

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Tata Steel's Jamshedpur plant

The government of India has invited preliminary bids for strategic sale of Neelachal Ispat Nigam Ltd (NINL). The Indian cabinet is also likely to take up the proposal for approval of strategic disinvestment of Rashtriya Ispat Nigam (RINL), the Vizag-based steel public sector unit (PSU) having 6.3 million tonnes per annum (mtpa) steel-making capacity.

In January last year, the Indian Cabinet had given an ‘in principle’ approval for strategic disinvestment of equity shareholding of MMTC (49.78 per cent), NMDC (10.10 per cent), MECON (0.68 per cent), BHEL (0.68 per cent), IPICOL (12.00 per cent) and OMC (20.47 per cent) in NINL to a strategic buyer, identified through a two-stage auction procedure.

“EoIs are invited for strategic disinvestment/privatization of Nilachal Ispat Nigam, a Joint Venture of MMTC, NMDC, BHEL, MECON and 2 Odisha Government PSUs, OMC and IPICOL today,” Department of Investment and Public Asset Management (DIPAM) Secretary Tuhin Kanta Pandey tweeted.

The last date for submission of Expression of Interest (EoI) by interested bidders is March 29. SBI Capital Markets is the transaction advisor of the sale. The strategic sale of NINL would spill over to next fiscal beginning April. The process of privatisation of Air India, BPCL, Pawan Hans, BEML, Shipping Corp and Ferro Scrap Nigam Ltd (FSNL) is ongoing.

In Rashtriya Ispat Nigaam, the government currently holds 100% stake in the company that mainly produces long products used in construction sector.  RINL has over 17,000 permanent employees. It has embarked on an expansion plan to enhance capacity to 7.3 million tonnes per annum.

RINL suffered a loss of Rs 1,369 crore in 2017-18; but was able to recover briefly with a net profit of Rs 97 crore in 2018-19. Again in 2019-20, it suffered Rs 3,910-crore loss. The company recorded Rs 16,618-crore revenue in 2017-18; Rs 20,844 crore in 2018-19 and Rs 15,920 crore in 2019-20.

The government is also looking to sell its entire 26.12 per cent stake in Tata Communications Ltd (TCL), erstwhile VSNL, through offer for sale and strategic sale route in the current fiscal. So far this fiscal, the government has netted Rs 17,957 crore through minority stake sale in central public sector enterprises (CPSEs) and share buybacks.

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