NMDC Steel strategic sale delayed; financial bids unlikely before Lok Sabha polls.

Financial bids for a majority stake in Chhattisgarh-based NMDC Steel (NSL), a subsidiary of the government-owned miner NMDC, are likely to be postponed until after the Lok Sabha elections in May next year. The delay in the proposed sale of the Centre's 50.79% stake in NSL is due to opposition from the Congress, which currently governs Chhattisgarh. The stake, with NSL's new 3 million tonne per annum hi-smelt technology at Nagarnar, is anticipated to be valued at least Rs 11,000 crore for the Centre.
The anticipated financial bids for NSL, originally planned after the commissioning of the new plant in August, have been postponed, according to sources. The fully operational steel plant, featuring new technology and a recently activated blast furnace, has garnered strong investor interest. With NMDC's substantial investment of around Rs 22,000 crore in the plant and minimal implementation risk, the NSL's share price has risen by 36%, reaching around Rs 41 as of October 23 from its Rs 30.25 listing on February 20. The strategic sale, involving top domestic and global steel firms, is expected to fetch a considerable amount, surpassing the current market share price. The Centre had received multiple expressions of interest on January 27 for its 50.79% stake in NSL, and an additional 10% stake would be offered to NMDC after identifying the strategic buyer through the bidding process.

Following the successful strategic disinvestment of Odisha-based NINL to Tata Group for Rs 12,100 crore in January 2022, NSL is poised to become the second steel firm to undergo divestment. In line with the new policy, which categorizes steel as a non-strategic sector, the Centre plans to privatize all viable steel units progressively. However, the pace of disinvestment has slowed down, with many strategic sales, including NSL, being postponed to the following year due to upcoming assembly elections in November and general elections in May. Currently, the Centre has achieved only Rs 8,000 crore, or 16%, of the FY24 disinvestment revenue target of Rs 51,000 crore in the present financial year.