State-run steel manufacturer Rashtriya Ispat Nigam Limited (RINL) has filed a draft prospectus with the capital markets regulator Securities and Exchange Board of India (SEBI) for an initial public offer in which the government will offload 10 per cent equity stake in the company.
The government currently owns 100 per cent stake in RINL.
Through the IPO, the government will sell 488.9 million equity shares though an offer for sale. The floor price at which the shares will be offered is yet to be decided.
According to the draft red herring prospectus (DRHP) filed with SEBI, the offer comprises a net offer to the public of 440 million equity shares and a reservation of 48.8 million equity shares for subscription by the eligible employees of the company.
Of the offer, 35 per cent will be reserved for retail investors and 50 per cent for qualified institutional buyers. It has been proposed to provide a discount of up to 5 per cent on the offer price to retail investors.
UBS Securities and Deutsche Equities will act as merchant bankers for the issue.
Vizag-based RINL had been planning to go public for a long time to retain its Navaratna status, which was accorded in November 2010 with the condition that it would get listed within two years.
RINL is the second-largest state-owned steel company in India, with original liquid steel production capacity of 3 million tonnes per annum (MTPA). The company has plans to increase it to 6.3 MTPA, which is expected to be operational by the end of the current financial year.
SAIL, ONGC, NHPC and Coal India are among the other state-run companies in which the government plans to pare stake to meet its fiscal disinvestment target for the current fiscal.
(Edited by Joby Puthuparampil Johnson)