Government Gets BSE's In-Principle Nod For Listing NMDC Steel

The government holds a 60.79% stake in NSL, which is the steel manufacturing facility of India's largest iron ore producer NMDC.

<div class="paragraphs"><p>NMDC Ltd. (Source: Company website)</p></div>
NMDC Ltd. (Source: Company website)

The government on Thursday said it received in-principle approval from the BSE on Dec. 30, 2022, for listing of NMDC Steel Ltd.

Currently, the government holds 60.79% stake in NSL, which is the steel manufacturing facility of India's largest iron ore producer NMDC located in Nagarnar, Chhattisgarh.

NSL is up for privatisation with the government looking to sell 50.79% of its shareholding, along with management control. The last date for putting in preliminary bids or Expression of Interest is Jan. 27.

In response to pre-bid queries received from interested bidders, the Department of Investment and Public Asset Management said the Ministry of Corporate Affairs on Oct. 6, 2022, approved the demerger of the steel manufacturing unit at Nagarnar from NMDC. The demerged entity would be NMDC Steel Ltd.

Subsequent to demerger, shares of NSL will be listed on BSE, National Stock Exchange of India Limited and Calcutta Stock Exchange.

"The listing process (of NSL) is ongoing. In principle approval from BSE for listing of 29,30,605,850 equity shares of Rs 10 each pursuant to Scheme of Arrangement between NMDC Ltd and NSL has been obtained on Dec. 30, 2022, "DIPAM said.

As per current estimates, the targeted date for commissioning of the steel manufacturing plant NSL is Mar. 31, DIPAM said.

NSL is expected to have a production capacity of 3 Million Tonne Per Annum.

In Oct. 2020, the CCEA gave its 'in-principle' approval to the demerger of the Nagarnar steel manufacturing unit from NMDC and strategic disinvestment of the resulting entity by selling entire stake of the Government of India.

Following that the government on Dec. 1, 2022, invited bids for buying 50.79% stake in NSL. The balance 10 per cent stake of the government would be offered to NMDC after the strategic buyer for 50.79% stake is selected.

To a query on whether NMDC will have certain special shareholder rights pursuant to its 10% stake in NSL, the DIPAM said, "Further details regarding supplementary transaction would be provided to shortlisted bidders during Stage II of the transaction through Definitive Agreement(s)".