Government Prepares to Invite Financial Bids for Privatizing NMDC Steel: The government is unlikely to invite financial bids for the privatisation of NMDC Steel until the blast furnace at the company’s steel facility in Chhattisgarh has been commissioned, according to officials. Officials anticipate that the company’s value will increase once the blast furnace of the steel factory is operational.
According to officials, the government is unlikely to invite financial bids for privatising NMDC Steel until the blast furnace at the company’s steel factory in Chhattisgarh has been commissioned.
Government Prepares to Invite Financial Bids for Privatizing NMDC Steel
Officials anticipate that the company’s value will increase once the blast furnace of the steel factory is operational. NSL is anticipated to have an annual production capacity of 3 million tonnes. The government owns a 60.79 percent stake in NMDC Steel Ltd (NSL) following its demerger from India’s largest iron ore producer, NMDC. The location of the facility is in Nagarnar, Chhattisgarh. The remaining 39.21% is held by the general public.
The government is attempting to privatise NSL by selling 50.79 percent of its shares along with management control. Multiple preliminary proposals or expressions of interest had been submitted to the government for the company.
The government will know the fair valuation of NSL once the blast furnace, the heart of a steel plant, is commissioned and production begins, according to government officials.
NMDC Steel, which was listed on the stock exchanges at Rs 30.25 per share in February of this year, is presently trading at approximately Rs 44 per share. At the current market price, the transfer of a 50.79 percent stake would generate approximately Rs 6,500 crore for the government.
In October 2020, the CCEA granted ‘in-principle’ approval for the demerger of the Nagarnar steel manufacturing unit from NMDC and the strategic disinvestment of the resulting entity through the sale of the Government of India’s complete stake. Following this, on December 1, 2022, the government solicited proposals for purchasing a 50.79 per cent stake in NSL. The remaining 10% of the government’s stake would be offered to NMDC following the selection of the strategic bidder for the 50.79% stake. The privatisation of NSL is anticipated to be concluded this fiscal year. The budgeted disinvestment target for the current fiscal year is Rs 51,000 crore; thus far, the government has raised Rs 4,235 crore through the sale of minority stakes in PSUs.
