RINL to file draft prospectus for IPO shortly
State-owned Rashtriya Ispat Nigam Ltd (RINL) is likely to file the draft prospectus for its initial public offer (IPO) in a few days, a move that will kick-start government's disinvestment programme for the current financial year.
"It (draft Red Herring Prospectus) is about to be filed in the next few days. We are ready with that more or less. It is on schedule," RINL Chairman A P Choudhary told reporters here on the sidelines of a CII Steel Summit.
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He added that the Department of Disinvestment will decide the proposed dates for the IPO, in which the government will sell its 10% stake.
Last week, Disinvestment Secretary Mohammad Haleem Khan had said the IPO will hit the market in June.
The IPO is expected to fetch Rs 2,500 crore to the exchequer at RINL's current valuations. Last week, the company increased its production capacity to 6.3 million tonnes per year at an investment of Rs 12,500 crore.
In January, the Cabinet Committee on Economic Affairs (CCEA) had approved 10% disinvestment in RINL.
The company has already initiated the IPO process and has appointed four merchant bankers -- UBS Securities, Deutsche Bank, Edelweiss Capital and IDBI Capital -- as the book running lead managers (BRLMs) to manage the issue.
About 10 days back, shareholders of RINL had approved the stock split in the ratio of 1:100. This means that one share with a value of Rs 1,000 was split into 100 shares worth Rs 10 each.
This move is expected to help the company to ensure wider retail participation in its proposed IPO.
The shareholders also approved the conversion of RINL to a public limited company from private company under the Companies Act, 1956.
The Vizag-based steel maker was given '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. Hence, it has time till November to come up with the IPO to fulfill the guidelines of being a Navratna firm.
RINL will be the first PSU to hit the capital markets in the current fiscal. The government has proposed to raise Rs 30,000 crore through stake sale in PSUs in 2012-13.
The other companies which are lined up for disinvestment in the current fiscal include SAIL, BHEL, Hindustan Copper, Oil India and Hindustan Aeronautics.
The government is trying to kick off the disinvestment programme from the beginning of the fiscal so that it could garner resources throughout the fiscal.
Last fiscal, owing to volatile market conditions the government had to postpone its sell off plans and could raise only Rs 14,000 crore through PSU stake sale against a target of Rs 40,000 crore.