EGoM to fix price band for RINL IPO tomorrow

EGoM to fix price band for RINL IPO tomorrow New Delhi: An Empowered Group of Ministers will decide tomorrow on the price band of Rashtriya Ispat Nigam's initial public offer, which is scheduled to hit the capital market on October 16.

A high-level committee, comprising officials from departments of steel and disinvestment, met Monday to suggest a price band to the EGoM, but left the matter to the ministerial panel.

"Officials at the meeting could not reach a consensus and decided to leave the issue to be resolved by the EGoM," a source said.

The EGoM, headed by Finance Minister P Chidambaram, will meet tomorrow.

The RINL issue, in which government's 10 percent stake or 48.90 crore shares would be diluted, would mark the kick-off the government's disinvestment process for the current fiscal. It is likely to contribute Rs 2,500 crore to the overall Rs 30,000 crore disinvestment target for 2012-13.

Meanwhile, speaking with reporters at the Economic Editors' Conference here, Chidambaram said, "We have lined up all the cases for the next six months. The first case (RINL) is coming up sometime this month."

The government has decided to reserve up to 50 percent of the issue for small investors in order to encourage wider participation.

The quota for Qualified Institutional Investors' has been set at 35 percent and 15 percent, for High Networth Individuals (HNIs).

The launch of the issue has already been deferred twice since the filing of the draft prospectus with market regulator Sebi on May 18 due to volatile market conditions and fire at its Vizag steel-making facility.

RINL is the second largest state-owned steel maker in the country producing three million tonnes per annum (mtpa) at its lone facility at Visakhapatnam. The capacity is being raised to 6.3 mtpa in the current fiscal.

The company has to bring out IPO before November to retain its Navratna status. RINL got the status on November 16, 2010, subject to its getting listed in two years from the date of acquiring the status.

The Cabinet Committee on Economic Affairs in January had approved disinvestment of 10 percent of government's 100 percent stake in the firm.

PTI