Disinvestment of RINL on the cards

Decks have been cleared for going ahead with 10 per cent disinvestment of Rashtriya Ispat Nigam Limited, the corporate entity of Visakhapatnam Steel Plant even as the unions have termed it as an attempt for privatisation.

The navratna company is faced with cash crunch to fund its plan to achieve a production capacity of 12 million tonne with an estimated investment of Rs.22,000 crore. M.N. Dastur & Co. has already submitted its report for the next phase of expansion.

The disinvestment process, which was taken up during UPA-II was deferred twice in 2012 due to volatile market. With change of guard at the Centre, Union Finance Minister Arun Jaitley told the Lok Sabha recently that the NDA Government would take up RINL disinvestment along with SAIL and HAL. We are not convinced with the contention that offloading of government shares will be restricted to just 10 per cent. It will subsequently open the floodgates for total privatisation, said All India Steel Workers Federation deputy general secretary D. Adinarayana. A RINL official said the navratna status to RINL would expire on November 16 before which either it had to be listed or the status extended for a year. Already it has been given two extensions due to uncertainty in the equity market.

Sources told The Hindu that RINL is expected to submit red herring prospectus to market regulator SEBI anytime for notifying Rs.2,500-crore IPO. Roadshows will be held both in India and abroad through the merchant bankers mainly to woo institutional investors.

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Disinvestment of RINL on the cards