Indian govt seeks bids for stake sale in NMDC's Nagarnar steel plant

The government, under the Ministry of Finance, has invited initial bids for selling 50.79% stake in NMDC Steel Limited (NSL), the resulting company, as per a DIPAM release.

Additionally, the government will offer 10% stake in the resulting company to NMDC after the strategic buyer has been identified through the bidding process and the remaining 39.21% will be subscribed by the public subsequent to shares of NSL being listed on the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE).

The Cabinet Committee on Economic Affairs (CCEA) had given its in-principle approval for the strategic divestment of Nagarnar Integrated Steel Plant (NISP), which is under construction. Subsequently, on 14 October, 2022, CCEA gave its nod for the demerger of NISP from national miner NMDC and strategic divestment of the resulting company by selling the entire GoI stake along with management control.

The Department of Investment & Public Asset Management (DIPAM) will conduct the transaction on behalf of GoI while SBI Capital Markets has been appointed as transaction advisor and J. Sagar Associates as legal advisor. The last date for submitting queries for bids is 29 December, 2022 and the bid submission date is 27 January, 2023.

NISP to commence operations from March 2023

The DIPAM release also indicates that NISP is expected to commence operations in March 2023. The plant is under construction and SteelMint had reported that, close on the heels of starting commercial production from its first coke oven plant (COB#1) from 27 October, 2022, NISP was getting ready with its second coke oven plant (COB#2) as well. Heating of the second coke oven started from 19 November and from 45 days hence, COB#2 is expected to also start producing met coke.

Both coke ovens together will have production capacity of 1.76 million tonnes of gross coke per annum. The coking coal requirement will be 2.29 mnt of hard CC plus soft and semi-soft from Australia.

The NISP BF has a capacity of 4,500 cubic metres. To charge a BF of this magnitude, initial coke volumes of 700 kg will be required for making one tonne of crude steel although this will eventually reduce to around 350 kg. That is why NISP has facility for two coke oven plants.