Government’s Big Move: Shipping Corporation of India and NMDC Steel Set for Fresh Push-up Post Elections!

New Delhi: After the general election concludes in early June, there will be a renewed push for the disinvestment of two state-run entities, Shipping Corporation of India (SCI) and NMDC Steel, according to a source familiar with the matter. The government is currently finalizing the board composition of Shipping Corporation of India Land and Assets Ltd (SCILAL), which was created by segregating the non-core real estate assets of SCI. This is being done to comply with regulatory requirements for listing the entity.

Once SCILAL is listed, the government plans to invite financial bids for its entire 63.75% stake in SCI. While SCILAL will continue to be under government ownership, SCI, with its core assets, will be privatized.

Last year, the Maharashtra government waived the stamp duty associated with the demerger of SCILAL, responding to the Centre’s request. This was a significant step in moving towards listing SCILAL. A person involved in the process stated, “These (privatisation of SCI and NMDC Steel) will be pursued vigorously after the election.”

Listing SCILAL will play a crucial role in determining the reserve price of SCI, as the current stock value of the shipping firm reflects both its core and non-core assets, according to another source familiar with the details. The government’s 63.75% stake in SCI is currently valued at approximately ₹7,800 crore based on the company’s latest stock price.

NMDC Steel selloff

Regarding NMDC Steel, the government intends to invite financial bids for a 50.79% stake soon after the elections. The decision to expedite the sell-off process was made after the company operationalized its 3 million tonnes per annum steel plant at Nagarnar in Chhattisgarh last August. It is important to note that the government aims to disinvest the steel-making segment (NMDC Steel) and not the mining segment (NMDC). This resulted in the demerger of NMDC and NMDC Steel in 2022, following which preliminary bids for the steel company were solicited.