Hyderabad: Union steel minister Birender Singh on Tuesday said the much-delayed initial public offering (IPO) of Rashtriya Ispat Nigam Ltd (RINL), the corporate entity of Vizag Steel, could be taken up after the steelmaker starts making profit.
The minister also ruled out the merger talks between RINL and National Mineral Development Corporation (NMDC), another public sector unit (PSU) under the steel ministry. “For RINL, there is no such proposal (IPO) as yet. Because RINL is not in profits now. And first RINL is also ramping up production. If that (expanded) production touches (optimum levels) and we start making profits then we may think of IPO," Singh told PTI on the sidelines of the inauguration of the 20th Asian Men’s Club League Handball Championship 2017.
RINL, which was earning steady profits up to 2014, has been making losses due to variety of reasons such as slowdown and cheap imports from China. It incurred Rs1,421 crore loss on Rs12,271 crore revenues in 2015-16 and Rs1,236 crore loss in 2015-16 on turnover of Rs12,706 crore.
The steel-maker also completed expansion of the capacity from three million tonnes per annum to 6mtpa with an investment of Rs12,300 crore and added another one million tonne by modernising the plant with an investment of Rs4,000 crore.
“RINL will reap the benefits from all these expansion programmes from 2018-19. We hope the global market would also revive giving a push to steel consumption in the country," a senior official of the PSU said. RINL had earlier said it filed the draft red herring prospectus with the markets regulator Securities and Exchange Board of India (Sebi) for an IPO in 2012. However, the proposal for listing in bourses was deferred several times owing to several reasons.
Replying to a query, the minister said the strategic disinvestment plan for the 3 million tonne steel plant is being put up by NMDC. He said about 90% of the work is completed and consultants for various activities are yet to be appointed. NMDC is setting up a new greenfield 3 million tonne per annum steel plant in Nargarnar of Chhattisgarh.
The PSU has so far spent Rs12,560 crore on the project, a senior official had said in September.