The Union Cabinet on Wednesday approved in-principle strategic disinvestment of equity shareholding in Neelachal Ispat Nigam Ltd (NINL), the state-level public enterprise (SLPE) at Kalinganagar in Odisha’s Jajpur.
Minerals and Metals Trading Corporation Ltd (MMTC), National Mineral Development Corp (NMDC), MECON and Bharat Heavy Electricals Ltd (BHEL) and the Odisha government hold stake in NINL.
MMTC, a trading firm under the Union Commerce and Industry Ministry, is the largest stakeholder in NINL with equity of 49.9 per cent. In a filing with the Bombay Stock Exchange (BSE) on June 27, 2019, MMTC informed on its intent to divest equity in the loss making steel company.
The Odisha government through its two undertakings – Odisha Mining Corporation (OMC) and Industrial Promotion & Investment Corporation of Odisha Ltd (Ipicol), owns 26 per cent stake. It too had been weighing options to exit it.
NMDC Ltd, BHEL Ltd, and Mecon Ltd own minority stakes in NINL.
BHEL had invested Rs 5 crore as equity in NINL. BHEL Board in their 509th meeting on August 30, 2018, held in New Delhi approved the proposal for strategic disinvestment of BHEL’s equity in NINL.
NINL has been consistently piling up losses for the past five years. In the last fiscal, the state-controlled player showed signs of a turnaround by registering profit at the operational level.
Opposing the privatisation of NINL and demanding immediate resumption of operations, the Neelachal Banchao Milita Mancha and Central Trade Union in December last year had urged the Odisha government to make investments to revive the factory.
Members of the employee association had also met Prime Minister Narendra Modi, Union Steel Minister Dharmendra Pradhan and Union Commerce Minister Piyush Goyal with the same request.