10% stakes of RINL are going to be disinvested by the government, as per the new proposed plan of the Finance Ministry. Steel ministry is asked to divest stakes in the next two years and company is directed to be listed. If the company fails to get listed, the Navratna tag given to it will be withdrawn.
The Finance Ministry is also said to be reforming the RINL as its size seems to be bigger than the capital it produces. Also, in order to make it economical for the investors, Steel Ministry and the RINL will most definitely divide equity shares prior to the disinvestment.
RINL is second largest steel producer in the country which is still solely owned by the government but by this move, it will be made a public company.
It was reported that the company produces 2.9 million tones of steel every year and up till March of this year, it had around 18,000 working employees in the company. From last year, it has seen a good growth of 8% and has aimed earnings of 13,600 crore India Rupees this year.
With this ploy, the government is hoping to make more money and raise the capital of the company. Because it is being listed for the first time in the National Stock Exchange (NSE), it will be introduced into the IPO.
Government is expecting to make 40,000 crores with this new proposed plan. Other than RINL, 10 more PSUs will share the same fate including BHEL, IndianOil, CoalIndia, MMTC, NBCC, ONGC and SAIL.
Bell The Bull Says – There will be a lot of hustle bustle in the NSE once these companies are listed. The introduction of the PSUs in NSE will prove most profitable to both the government and its shareholders.