RINL IPO may go ahead despite management's plea to defer it
New Delhi: State-run Rashtriya Ispat Nigam's appeal to defer its Rs 2,500 crore IPO in view of a fire at its plant killing 19 may go unheeded, with the Department of Disinvestment deciding to go ahead with the plan to launch the issue towards the end of this month.
"Basically, this is not an issue that is connected with the disinvestment. Its a very unfortunate event," Steel Secretary D R S Chaudhary told reporters here when asked about the RINL's plea to defer the IPO in view of the fire accident.
The RINL management wrote a letter to the Steel Ministry on June 22 requesting deferring the IPO as employees' morale has touched a low after the fire that killed 19 people including 12 staffers.
On June 13, a major explosion took place during the trial of a new oxygen control unit near the steel melting shop at RINL's Vizag facility, resulting in the fire and the subsequent deaths.
The IPO is scheduled to hit the market in the last week of July. The launch has already been deferred once by three weeks after suggestions of the merchant bankers in view of the subdued market conditions.
Chaudhary said the road shows were currently going on, but the decision on launching the issue would be taken by the Department of Disinvestment (DoD).
"The decision on when and how to market it will be taken by the DoD. We don't finalise the dates which will be decided by the DoD," he said.
"It's very unfortunate that the accident happened. It's bad luck that it happened. In future, we want to make sure that these things don't happen again," Chaudhary added.
When asked if the Steel Ministry conveyed RINL's plea to the DoD, he said, "All of you have conveyed it in the press".
The merchant bankers to the issue - UBS Securities India and Deutsche Equities (India) - had also advised DoD to defer the issue till September-October in the wake of the disaster.
RINL had submitted the draft red herring prospectus with the market regulator SEBI on May 18. The company has to bring out its IPO before November this year as its Navratna status, accorded on November 16, 2010, is subject to its getting listed in two years (from the date of acquiring the status).