To encourage wider participation from small investors,the government will reserve at least 50 per cent of the Rs 2,500 crore Rashtriya Ispat Nigam IPO for retail subscription from 35 per cent proposed earlier,according to sources.
A decision in this regard has been taken at a review meeting,under the Chairmanship of Department of Disinvestment Secretary,earlier this month,a source in the ministry said.
“The quota for retail subscription would be increased to at least 50 per cent from the existing 35 per cent. The QIB quota would stand reduced to an equivalent extent (35 per cent). The quota for HNI would remain at least 15 per cent,” he said.
The initial public offer (IPO) of Rashtriya Ispat Nigam (RINL) is likely to hit the market on October 16 and will remain open for subscription till October 18.
The source,however,said: “It was also flagged that there would be a provision that in case of under subscription in any of the categories,the over-subscription in the other categories would be utilised to fill in the under-subscribed portion.”
The RINL issue has already missed a couple of deadlines since the filing of draft documents with the market regulator Sebi on May 18. The issue would mark the kick-off government’s disinvestment process for the current fiscal.
The deferment was due to volatile market conditions and fire at its Vizag steel- making facility.
RINL is the second largest state-owned 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.
The source said RINL has been asked by the Department of Disinvestment (DoD) to submit the Red Herring Prospectus (RHP) with the market regulator SEBI on September 24.
The issue price would be finalised at a meeting of the Empowered Group of Ministers (EGoM),likely on October 8,and be made public the next day.
RINL has to bring out IPO before November to retain its Navratna status. RINL got the status on November 16,2010,subject to its getting listed in two years from the date of acquiring the status.
The Cabinet Committee on Economic Affairs in January had approved disinvestment of 10 per cent of government’s 100 per cent stake in the firm.