New Delhi: The government will kick start its disinvestment programme for the current fiscal from June with stake sale in steel major Rashtriya Ispat Nigam Ltd (RINL) through an initial public offering (IPO) that could fetch about Rs 2,500 crore to the exchequer.
   
"We will be filing the draft papers for 10 percent stake sale in RINL in the first two weeks of May. The IPO will hit the market in June," Disinvestment Secretary Mohammad Haleem
Khan told.
   
In January, the Cabinet Committee on Economic Affairs (CCEA) had approved 10 percent disinvestment in RINL.
   
The company has already initiated the IPO process and has appointed four merchant bankers --UBS Securities, Deutsche Bank, Edelweiss Capital and IDBI Capital-- as the book running lead managers (BRLMs) to manage the issue.
   
Last week, the shareholders of RINL had approved the stock split in the ratio of 1:100. This meant that one share with a value of Rs 1,000 was split into 100 shares worth Rs 10 each.
   
This move is expected to help the company to ensure wider retail participation in its proposed IPO.
   
The shareholders also approved the conversion of RINL to a public limited company from private company under the Companies Act 1956.
   
The Vizag-based steel maker was given 'Navratna' status on November 16, 2010, subject to the condition that it would list its shares in two years from the date of acquiring the status. Hence, it has time till November to come up with the IPO to fulfil the guidelines of being a Navratna firm.
   
RINL is likely to be the first PSU to hit the capital markets in the current fiscal. The government proposes to raise Rs 30,000 crore through stake sale in PSUs in 2012-13.
   
The other companies which are lined up for disinvestment in the current fiscal include SAIL, BHEL, Hindustan Copper, Oil India and Hindustan Aeronautics.
   
The government is trying to kick off the disinvestment programme from the beginning of the fiscal so that it could garner resources throughout the fiscal.
   
Last fiscal, owing to volatile market conditions the government had to postpone its sell off plans and could only divest stake in Power Finance Corporation (PFC), Oil and Natural Gas Corporation (ONGC) and National Buildings Construction Corporation (NBCC).
   
As against the disinvestment target of Rs 40,000 crore in 2011-12, the government could raise only Rs 14,000 crore through PSU stake sale.

(Agencies)