The regulatory approval for the initial public offering (IPO) of Rashtriya Ispat Nigam (RINL) has lapsed for the second time in last four years, as lack of investor appetite for metal companies forced the state-owned firm to postpone its plans. The Sebi approval for the IPO expired on December 22, official data showed.
A senior investment banker told FE the company has no plans to refile the draft prospectus in near future.“The company wanted to raise close to R1,500 crore. At current valuations, it will not be able to mop up the expected amount. RINL will have to wait till commodity prices go up in global markets,” the investment banker said on condition of anonymity.
As per Sebi ICDR regulations, a company has one year from the date of approval of the RHP to hit the primary markets. If a company fails to do so in the said period, it needs to refile prospectus with the regulator for approval.
Finance minister Arun Jaitley said last week the government would not disinvest its holding at a time when commodity prices are low. Jaitley had also indicated that the government may not be able to meet its ambitious disinvestment target of R69,500 crore this financial year due to tepid domestic stock market and global meltdown in commodities.
The calendar year 2015 has been a subdued one for metal companies as falling global commodity prices and lack of demand for metals impacted Ebidta and profits of metal producers. The BSE Metal index fell more than 30% during the year.