The government is working out the transaction structure for the strategic sale of RINL or Vizag Steel, DIPAM Secretary Tuhin Kanta Pandey said on Friday.
The Cabinet Committee on Economic Affairs had in January 2021 given in-principle approval for 100 per cent strategic disinvestment of the government shareholding in Rashtriya Ispat Nigam Limited (RINL) — also called Visakhapatnam Steel Plant or Vizag Steel — along with RINL’s stake in its subsidiaries/joint ventures.
“The in-principle approval is there. We are going forward in working out the transaction structure,” the Department of Investment and Public Asset Management Secretary said at the CII Global Economic Policy Summit.
Department of Investment and Public Asset Management (DIPAM), which manages the government’s equity in public sector companies, earlier in March floated the request for proposal (RFP) for appointing an asset valuer registered with the Insolvency and Bankruptcy Board of India (IBBI) to carry out the valuation of the company’s assets and assist the Centre in the process of strategic disinvestment of RINL.
While the government is trying for the strategic sale of RINL, the trade unions are opposing the privatisation move. Earlier this year, they had put forward a proposal for merging the company with the state-owned Steel Authority of India Ltd (SAIL), but the Finance Ministry rejected the idea citing the New Public Sector Enterprise (PSEs) policy.
As per the policy, steel manufacturing in the non-strategic sector and PSUs falling in this sector would be considered for privatisation or would be closed. There is no scope to consider the merger among CPSEs for non-strategic sector PSUs.
Pandey further said this year BSE CPSE and NSE CPSE index has grown twice the rate of Sensex and Nifty.
Listed public sector companies have got a market cap of Rs 22 lakh crore, of which Rs 12 lakh crore belong to the government and the rest is with public and institutional investors.