New Delhi: In pursuance of the Union Cabinet’s decision, the Central Government is likely to invite the expression of interest for strategic sale of the National Mineral Development Corporation’s (NMDC) Nagarnar Steel Plant (NSP) in Chattisgarh by the end of this fiscal.
An official of the NMDC Ltd said that NSP, which is under construction and is wholly owned subsidiary of the NMDC, is expected to commence its production by this month. “The Department of Investment and Public Asset Management (DIPAM) will proceed with the privatisation of NSP once its demerger process with NMDC is complete,” he said.
“The demerger process is in the final stages. We will go ahead with appointing merchant bankers after the NSP is brought in operation,” said the official.
The NMDC Limited is the country’s largest exporter & producer of iron ore, producing about 30 million tonnes of iron ore from its Chhattisgarh & Karnataka mines. It was established in 1958 as an owned and operated public company by the Government of India. It is under the administrative jurisdiction of the Ministry of Steel and has its head office in Hyderabad, India.
“The preliminary bids or EoI is likely to be invited from bidders by March-end. The sale process will happen in the next fiscal beginning April 2023,” said a senior official familiar with the process.
The NSP is being constructed over 1,980 acre land at an estimated cost of ₹23,140 crore. After the demerger, shareholders of NMDC will also be shareholders of the demerged company (NSP) in the proportion of their shareholding. Hence, the government will hold 60.79 per cent of NSP, and the remaining stake will be with retail and institutional investors. After the demerger, investors will have better visibility of the operations and cash flow of NMDC and NSP, separately.
The yield from selling the entire state of the Centre will accrue to the exchequer. NSP’s valuation will be assessed separately by the asset valuer and transaction advisor during the strategic sale process. The Union Cabinet in October 2020 approved the demerger of the plant from NMDC and the sale of the Centre’s entire stake to a strategic buyer.
Officials said that NSP is in construction-completion stage, and various facilities are “under testing and trial”. The plant’s commissioning has been got delayed apparently owing a breakdown at the site. Supply of motor for the oxygen plant is expected by December 31, 2022. The plant is expected to start with hot trial in steel melting shop, thin slab caster of its hot strip mill and first roll out of coil.