Rashtriya Ispat Nigam Ltd's Rs 2,500-crore initial public offering (IPO) has been been put on hold by the government in view of the weak market conditions.
"We have just been informed that the IPO process and the filing (of Red Herring Prospectus) has been put on hold. There is no visibility on when the process will be started again," UBS Securities, one of the two merchant bankers to the proposed issue, wrote in an e-mailed statement to the company.
There is no clarity on when the public issue would be launched next. The issue, which was originally proposed to be launched in the first week of July, was deferred to month-end due to the weak global market conditions.
Sources said lukewarm response in a recent roadshow in London might be the reason for the deferring it once again. They also said RINL was supposed to file the RHP with the market regulator Securities and Exchange Board of India (SEBI) tomorrow, but it has already received a communication from the Department of Disinvestment (DoD) not to go ahead.
Meanwhile, sources close to the company said,"The ball is in DoD's court. They will have to take the call. They will have to announce the new schedule as RINL will have to complete its IPO by November to retain Navaratna status".
The RINL management wrote a letter to the Steel Ministry on June 22 requesting deferment of the IPO as employee morale had eroded after a fire at its Vizag plant that killed 19 people, including 12 staffers. However, the DoD intended to proceed with the issue.