Financial bids for NMDC Steel, which may fetch the government around Rs 11,000 crore for its 50.79% stake, will likely be invited after the company’s brand-new steel plant in Chhattisgarh becomes fully operational in June.
Opening of the plant has begun with coke making, an official told FE, adding that the blast furnace too will likely be functional by June.
“Shortlisted bidders will have a look at the fully commissioned plant by June. Financial bids will likely be called thereafter,” the official said.
NMDC has already invested about Rs 22,000 crore in building the new plant, with almost nil implementation risk. The scheduled date of completion was March 2023.
After listing at `30.25 on the stock exchanges on February 20 this year, the share price of the NMDC steel unit increased 20% to around `36.5 on Wednesday.
The strategic sale is expected to garner substantially more than reflected by the market share price in the competitive bidding process, involving some of the top domestic and global steel firms.
To ensure a smooth sale of the new 3-million tonne/annum steel plant, the government is not averse to the demand of 1,000-odd employees to be absorbed in NMDC rather than NMDC Steel.
On January 27, the Centre received multiple expressions of interest (EoIs) for its 50.79% stake in the newly built NMDC Steel (NSL) at Nagarnar in Chhattisgarh. Additionally, the Centre would offer a 10% stake in NSL to NMDC, after the strategic buyer has been identified through the bidding process.
After the successful strategic disinvestment of Odisha-based NINL, jointly owned by four Central PSUs and two Odisha government PSUs for `12,100 crore in January 2022 to Tata Group, NSL would be the second steel firm to be divested.
