Taking forward the drive to sell stake in state-owned firms, the Finance Ministry has asked the Ministry of Steel to divest about 10 per cent of its stake in RINL within next two years and list the firm on bourses or else the PSU's status of Navratna will be withdrawn.
"Rashtriya Ispat Nigam Ltd (RINL) was recently given the Navratna tag. As per the condition laid out at the time of giving the status, RINL has to get listed in next two years, else the status would be withdrawn.
"Thus, the Department of Disinvestment under the Finance Ministry has asked the Steel Ministry to divest some stake in the company within next two years and get it listed," a senior official of the PSU told PTI.
At present, the Union government holds 100 per cent equity in the steel maker. According to Steel Ministry sources, a minimum of 10 per cent of government's stake could be sold in RINL through an initial public offer.
Department of Disinvestment Joint Secretary Sidhartha Pradhan had earlier said that RINL could be disinvested in January 2011.
RINL could be the fourth steel PSU after NMDC, SAIL, Manganese Ore India Ltd, in which government is going for disinvestment to part fund its social and infrastructure plans.
"Before carrying out the disinvestment in RINL, the company is likely to restructure its equity base to attract better valuations," the official said, adding that no estimates of the amount to be raised by the government through share sale of the company have been worked out yet.
RINL in March 2010 joined the club of Navratna companies like SAIL, NMDC, Coal India. The status gives more financial and administrative autonomy to the company's board. The Board can take investment decisions for an amount of up to Rs 1,000 crore, without seeking Steel Ministry's permission.
The central government has set a target of raising as much as Rs 40,000 crore through share sale programmes this fiscal. It had raised about Rs 10,000 crore by selling around 8.38 per cent of its stake in NMDC.
It is expected to raise a total of around Rs 16,000 crore through SAIL share sale, which will see the government selling 10 per cent of its equity in the steel firm and the company raising fresh equity in the same proportion.
In case of MOIL, the government is considering selling 10 per cent of its stake and list the company on the bourses. According to Pradhan, MOIL could be divested by December.