Govt gets multiple initial bids for NMDC Steel disinvestment

The government has received multiple preliminary bids for the privatisation of NMDC Steel Ltd (NSL), DIPAM Secretary Tuhin Kanta Pandey said on Friday.

Currently, the government holds a 60.79 per cent stake in NSL, which is the steel manufacturing facility of India's largest iron ore producer NMDC located in Nagarnar, Chhattisgarh.

NSL is up for privatisation with the government looking to sell 50.79 per cent of its shareholding, along with management control. The government had on December 1, 2022, invited preliminary bids or expressions of interest (EoI) for the strategic sale and the last date for putting in bids was January 27.

"Multiple Expressions of Interest (EoI) received for the Strategic Disinvestment of NMDC Steel Ltd (NSL)," Pandey tweeted.

The transaction will now move to the second stage, he added.

In response to pre-bid queries received from interested bidders, the Department of Investment and Public Asset Management (DIPAM) had earlier this month said the Ministry of Corporate Affairs on October 6, 2022, approved the demerger of the steel manufacturing unit at Nagarnar from NMDC. The demerged entity would be NMDC Steel Ltd (NSL).

Subsequent to the demerger, shares of NSL will be listed on BSE, National Stock Exchange of India Limited and Calcutta Stock Exchange.

As per current estimates, the targeted date for commissioning of the steel manufacturing plant NSL is March 31, DIPAM said.

NSL is expected to have a production capacity of 3 million tonne per annum (MTPA).

In October 2020, the CCEA gave its 'in-principle' approval to the demerger of the Nagarnar steel manufacturing unit from NMDC and strategic disinvestment of the resulting entity by selling the entire stake of the central government.

Following that the government on December 1, 2022, invited bids for buying a 50.79 per cent stake in NSL. The balance 10 per cent stake of the government would be offered to NMDC after the strategic buyer for the 50.79 per cent stake is selected.