Government may start divestment process with IPO by RINL

The government is expected to set in motion the divestment process with an initial public offer of Rashtriya Ispat Nigam Ltd (RINL) amidst weak market sentiment.

The government, which held back most of its divestment plans in the 2011-12 financial year, expects to raise a total of Rs30,000 crore from sale of stake in state-run enterprises this financial year.

The union cabinet has last month cleared a proposal for divesting 10.82 per cent government stake in Steel Authority of India (SAIL).

The government, which holds 85.82 per cent equity stake in SAIL, the country's top steel producer, hopes to raise about Rs4,000 crore from the stake sale.

Market analysts see the RINL share offer as an alternative to SAIL divestment. The move comes amidst poor private sector response to government stake sale in ONGC Ltd last fiscal.

Industry associations like the Assocham wants the government to widen the divestment target to allow for the lower price the sales may fetch.