NMDC Nagarnar unit opens soon, govt to call bids
An inter-ministerial group is finalizing the draft share purchase agreement for NMDC Steel, and financial bids may be invited in the December quarter once the plant is up and running
PremiumThe government plans to commission NMDC Steel Ltd’s (NSL’s) 3 million tonne plant at Nagarnar in Chhattisgarh by the end of the month before inviting financial bids for its strategic sale, a steel ministry official aware of the plans said.
An inter-ministerial group is finalizing the draft share purchase agreement for NMDC Steel, and financial bids may be invited in the December quarter once the plant is up and running, the official said on condition of anonymity.
In February, NMDC Steel was spun off from iron ore producer NMDC Ltd, a navratna central public sector enterprise and listed as a separate company on BSE. Shares of NSL closed unchanged at ₹43.96 on BSE on Friday.
The government plans to sell 50.79% of its 60.79% stake in the steel plant, which is being built at a cost of ₹20,000 crore. Interested investors may get to visit the site before the final bids are called, the official cited above said.
Queries sent to the finance ministry, department of investment and public asset management (DIPAM) and steel ministry remained unanswered till press time.
The steel ministry official cited earlier said the work of operationalizing different segments of the plant is in process. Its coke oven, sinter plant, and oxygen plant have been operationalized, and steel production would start soon, the official added.
“The plant will be a good strategic asset, especially for steelmakers looking to add capacity and quickly start production. With its proximity to iron ore mines and connectivity to ports, the steel plant presents a good set-up for integrated steel players," an executive at a private sector steel major said on condition of anonymity.
Top steel companies have already shown interest in the steel plant but have been waiting for the plant’s commissioning.
The state of Chhattisgarh is interested in bidding for the plant to operate it within government ownership, a state government official said. However, public sector enterprises where the government has more than 51% ownership are not eligible to bid. The conditions also mention that interested bidders, either sole or consortium, should have a minimum net worth of ₹5,000 crore.
DIPAM has previously said that the government will transfer its remaining 10% stake in NMDC Steel to NMDC after the disinvestment.
Potential bidders were keen to know whether and when NMDC Ltd would sell this stake.
The department said recently, in response to their queries, that details regarding supplementary transactions will be provided to shortlisted bidders during the second stage of the transaction.
The ministry of corporate affairs approved the demerger of NMDC Steel in October last year.
In December, the government said it would list shares of the demerged company on stock exchanges, sell its equity and transfer management control to the winning bidder.
In December, the central government received in-principle approval from BSE for the listing of NMDC Steel, and it got listed in February.
The government first approved the disinvestment in October 2020, when the Cabinet Committee on Economic Affairs gave its in-principle approval to the demerger and strategic disinvestment of the resulting entity by selling the entire stake held by the government.
The government has set a disinvestment target of ₹51,000 crore for the year ending on 31 March 2024, lower than the previous fiscal year, according to the Union budget for FY24.
Estimates for the year ended on 31 March 2023 were also revised to ₹50,000 crore from the earlier target of ₹65,000 crore.
In FY24, the government carried forward earlier disinvestment proposals for IDBI Bank, HLL Lifecare, BEML, Shipping Corp. of India, among others.
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