Rashtriya Ispat Nigam to remain PSU after IPO, says government

Rashtriya Ispat Nigam Ltd (RINL), the corporate entity of Vizag Steel, will continue to be a public sector undertaking post the listing of its shares on stock exchange, the government said on Friday.

In a written reply to the Lok Sabha, Minister of State for Finance P Radhakrishnan said that the decision of the Cabinet Committee on Economic Affairs (CCEA) is for listing of shares of RINL through disinvestment of 10 percent paid up equity through the initial public offer (IPO) process.

The government shareholding in the company is 100 percent, he said.

"The decision does not tantamount for privatisation of RINL," Radhakrishnan said.

RINL had filed the draft red herring prospectus with the markets regulator Securities and Exchange Board of India (SEBI) for an IPO in 2012.

However, the proposal for listing in bourses was deferred several times owing to several reasons. The minister noted that RINL made profits consecutively since 2002-03 to 2014-15.

The company however incurred losses in the subsequent financial years inter alia due to cheaper imports, adverse market condition, lower net sales realisation of steel products increase in imported and indigenous coal prices, downturn in global steel industry.

Replying to a separate query, Radhakrishnan said as per the information provided by Department of Public Enterprises (DPE), 165 central public sector enterprises (CPSEs) have made profits and 78 CPSEs have incurred loss in 2015-16. "One CPSE posted no profit/loss in 2015-16," he pointed out.