• DIPAM said in a circular that it is looking to engage legal advisor and transaction advisor for the strategic disinvestment of Ferro Scrap Nigam Ltd

• DIPAM has so far managed to raise Rs 6,138.48 crore from minority stake sale in HAL, BDL and Mazagon Dock Shipbuilders Ltd

New Delhi: The Centre has begun the process for the privatisation of Ferro Scrap Nigam Ltd, a wholly-owned subsidiary of MSTC Limited. The Department of Investment and Public Asset Management (DIPAM) said in a circular on Monday that it is looking to engage legal advisor and transaction advisor for the strategic disinvestment of Ferro Scrap Nigam Ltd. "The Government of India has 'in-principle, decided to disinvest 100 percent equity in Ferro Scrap Nigam Limited (FSNL) — a 100 percent subsidiary of MSTC Ltd. through Strategic Sale along with transfer of management control," said the circular.

Ferro Scrap Nigam Ltd is a Miniratna II PSU under the Ministry of Steel and a wholly-owned subsidiary of MSTC Ltd based in Bhilai, Chhattisgarh. It has an authorised share capital of Rs 50 crore and paid-up share capital of Rs 32 crore. The company is working in eight steel plants in the country, BHEL Haridwar, and Rail Wheel Factory in Bangaluru.

ALSO READ: PSU assets worth over Rs 100 crore to be monetised by DIPAM

Bidders should have handled disinvestment of company worth Rs 500 cr

Listing down the eligibility criteria for the bidders, the DIPAM said that bidders should have handled and successfully completed at least one transaction of merger/ acquisition/ takeover/ strategic disinvestment/ private equity investment transactions of a listed or unlisted company of the size of Rs 500 crore or more between October 2017 and September 2020. 

The backdrop

For FY2020-21, the government has set a target to raise Rs 2.1 lakh crore from disinvestment. Out of this, the DIPAM has so far managed to raise Rs 6,138.48 crore from minority stake sale in HAL, BDL and Mazagon Dock Shipbuilders Ltd. With two quarters already behind, the government is keenly watching investor appetite to push its disinvestment plans for the year ahead. The Department has also just extended the submission deadline for Expression of Interest (EoI) for Air India sale to December 14. Air India, BPCL, CONCOR and SCI are some of the major disinvestment plans that the government is looking to push through in the current financial year. 

(PSU Watch– India's Business News centre that places the spotlight on PSUs, Bureaucracy, Defence and Public Policy is now on Telegram. Join PSU Watch Channel in your Telegram and stay updated)