Rashtriya Ispat Nigam Ltd. (RINL) has submitted the draft red herring prospectus (DRHP) with market regulator SEBI to divest 48.898 crore shares or 10 per cent stake through an initial public offer (IPO).

The IPO is part of the government's disinvestment plan to raise Rs.30,000 crore during the current financial year through selling of stakes in state-run companies.

“The objects of the offer are to carry out disinvestment of 48.898 crore equity shares by the selling shareholder and to achieve the benefits of listing the equity shares on the stock exchanges. Our company will not receive any proceeds from the offer and all proceeds shall go to the selling shareholder,” RINL said in the DRHP.

The issue price would be determined through the book building route. It would offer up to five per cent discount to retail investors and employees.

RINL is the second largest state-run steel maker in the country producing three million tonnes per annum (mtpa) at its lone facility at Visakhapatnam The capacity is being raised to 6.3 mtpa in the current fiscal.

UBS Securities India and Deutsche Equities (India) are the book running lead managers to the issue while Karvy Computershare would act as the registrar.

The proposed share sale would also help RINL in retaining its Navratna status, which was accorded on November 16, 2010, subject to the condition that it would get listed in two years (from the date of acquiring the status). The other PSUs lined up for disinvestment in the current fiscal include SAIL, Hindustan Copper, Oil India and Hindustan Aeronautics.

Last fiscal, the government had to postpone the share sale plan of the PSUs due to volatility in the capital markets.

More In: Companies | Business