The government is likely to invite preliminary bids for the strategic sale of NMDC's Nagarnar Steel Plant by March-end, an official said.
The official said that NMDC's under-construction steel plant in Chhattisgarh is expected to commence operation this month, and once the demerger process is complete, the Department of Investment and Public Asset Management (DIPAM) will proceed with the privatisation of Nagarnar Steel Plant.
"The demerger of NMDC and Nagarnar Steel Plant (NSP) is in the final stages, and the plant is expected to commence operation this month. We will proceed with appointing merchant bankers thereafter," the official told PTI.
The official said the preliminary bids or EoI is likely to be invited from bidders by March-end. The sale process will happen in the next fiscal beginning April 2023.
NMDC, the country's largest iron ore mining company, is setting up a 3 million tonne per annum steel plant at Nagarnar near Bastar in Chhattisgarh. The unit is being constructed over 1,980 acre at an estimated cost of Rs 23,140 crore. Post demerger, Nagarnar Steel Plant will be a separate company.
After the demerger, shareholders of NMDC will also be shareholders of the demerged company (NSP) in the proportion of their shareholding. Hence, the government will hold 60.79 per cent of NSP, and the remaining stake will be with retail and institutional investors. After the demerger, investors will have better visibility of the operations and cash flow of NMDC and NSP, separately.
The proceeds from selling the entire government stake will accrue to the exchequer, the official said, adding that NSP's valuation would have to be done separately by the asset valuer and transaction advisor at a later stage in the strategic sale process. The Union Cabinet in October 2020 approved the demerger of the plant from NMDC and the sale of the Centre's entire stake to a strategic buyer.
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