New Delhi: State-owned Rashtriya Ispat Nigam Ltd is likely to file the draft red herring prospectus (DRHP) for its initial public offer with the market regulator Sebi on May 17.
"RINL is likely to submit the DRHP on May 17," a Steel Ministry source said, adding that the government would dilute 10 per cent of its stake in the Vizag-based steel maker.
The RINL IPO would start government's disinvestment programme for the current financial year. The Finance Ministry has planned to raise Rs 30,000 crore through share sales of the public sector companies in 2012-13.
The Cabinet Committee on Economic Affairs in January had approved disinvestment in RINL. The government aims to raise Rs 2,500 crore by divesting 10 per cent stake. It has 100 per cent holding in the company.
RINL has recently increased its steel-making capacity to 6.3 million tonnes per year from 2.9 million tonnes per annum earlier with an investment of Rs 12,500 crore.
The company has already initiated the IPO process and has appointed four merchant bankers -- UBS Securities, Deutsche Bank, Edelweiss Capital and IDBI Capital -- as the book running lead managers.
It recently got shareholders' approval to a stock split in the ratio of 1:100 to ensure wider retail participation in its proposed IPO.
The steel maker was given 'Navratna' status on November 16, 2010, subject to the condition that it would list its shares in two years from the date of acquiring the status. Hence, it has time till November to come up with the IPO to fulfill the guidelines of being a Navratna firm.
The other PSUs lined up for disinvestment in the current fiscal include SAIL, BHEL, Hindustan Copper, Oil India and Hindustan Aeronautics.
The government is trying to commence the disinvestment programme from the beginning of the fiscal so that it could garner resources throughout the fiscal.
Last fiscal owing to volatile market conditions, the government had to postpone its sell off plans and could raise only Rs 14,000 crore through PSU stake sale against a target of Rs 40,000 crore.