The erstwhile Disinvestment Commission, while categorising NMDC as a "core" company, had recommended offloading of up to 25 per cent of government stake to a foreign partner. The government holds 98 per cent shares of the company.

The commission had further suggested that if 20-25 per cent shares could not be sold to a foreign joint venture partner, the government could offload up to 49 per cent of its equity. It had strongly recommened that in any case, the government should retain at least 51 per cent in NMDC "till such time as an effective regulatory mechanism is put in place to regulate exploration and export of iron of ore."

The steel ministry is against any divestment in NMDC, as the company has been consistently making profits for the last eight years. The core group of secretaries as well as the DoD have agreed with the deferment of NMDC disinvestment.

This seems to be in line with the DoD's insistence on proper disinvestment. Earlier, it had turned down 10 per cent offloading of government equity in Indian Oil Corporation. The department had asked the ministry of petroleum and natural gas to prepare a road map for the oil giant before any disinvestment.

Similarly, in the case of Kudremukh Iron Ore Company Ltd (KIOCL), the DoD sought deferment unless all the impediments in the path to privatisation were removed.

The Disinvestment Commission had found the operations of NMDC to be "improving." It supported the company's proposal to get into exploration and mining of metals other than iron-ore in African countries. Given the financial requirements of such ventures overseas, the commission suggested that the company should get into these activities through joint ventures with overseas parties.

The authorised capital of NMDC is Rs 150 crore, while the paid-up capital is Rs 132.16 crore. Its turnover during 1998-99 was Rs 725.23 crore. During the first half of the last fiscal, turnover was Rs 310.77 crore. Profit before tax for the corresponding periods was Rs 171.99 crore and Rs 60.25 crore, respectively.

Incorporated in 1958, NMDC is engaged in the business of developing and exploiting mineral resources other than coal, oil, natural gas and atomic minerals. Presently, its activities are concentrated on the mining of iron ore, limestone and diamonds.

The government sold off its 21.3 lakh shares, representing 1.61 per cent of the paid-up capital, in 1992-93 at an average prices of Rs 83.52 per share. During 1997-98, another 5,154 shares were sold at the rate of Rs 71. After that, no disinvestment took place.