Despite difficult market conditions, the disinvestment department is working hard to push some of the PSU stake sale offers in the remaining period of the current fiscal. According to sources, the department has shortlisted two investment bankers ? UBS Securities and Deutsche Bank ? as the lead managers to manage the initial public offer (IPO) of steel firm Rashtriya Ispat Nigam.
A clutch of other disinvestment proposals are also being pursued in right earnest. The plan is to get the formalities completed so that the respective companies could hit the market with their public offers at short notice.
?We are waiting for the final approval for two shortlisted bankers which is expected to come within a week,? a finance ministry official told FE. The appointment of bankers will help RINL to get the valuation process completed so that its IPO can be launched when market conditions are conducive, the official added The government wants companies to complete the home work in advance so that it could fast track disinvestment cases and try to garner the trageted earnings of R40,000 from PSU stake sales for the fiscal. So far in the fiscal, the government has been able to mop up only R1,100 crore by offloading stake in Power Finance Corporation (PFC). The issues of SAIL, Hindustan Copper and now ONGC have been deferred this year due to volatile market conditions.
In case of RINL, the disinvestment department had received application of five merchant bankers namely, IDFC Capital, Deutsche Bank, Edelweiss Capital, IDBI Capital and UBS Securities for the RINL offer.
The two shortlisted bankers quoted R1 as their management fee for the issue. The department is expecting the issue to come for the January-March quarter as the fund managers will take more than a month to file draft red herring prospectus and approval from Sebi also requires a month.
The disinvestment department in early September had invited request for proposals (RFPs) from merchant bankers to engage book running lead managers to handle the issue.
The public sector major currently has five functional directors including the chairman AP Chaudhary, two government nominees and four independent directors taking the total strength to eleven members. The company?s board is short of three independent director to meet Sebi?s listing norms.