Central government to disinvest its stake in Nagarnar steel company of NMDC

Tags: Economy/Finance

The Union Finance ministry has invited bids for the NDMC Steel Plant (NSL) at Nagarnar in Chhattisgarh and has offered to sell 50.79% of its stake in the company.

The 3 million tonnes per annum NSL steel plant, promoted by National Mineral Development Corporation (NMDC) is still under construction and is expected to become operational in March 2023. 

In October 2020, the government of India had approved a proposal to demerge the Steel plant of the NMDC and also the proposal to sell the entire government stake in the steel plant to a strategic investor.  

This will clear the way for the government for further disinvestment in NDMC.

Disinvestment in NSL 

Under the disinvestment proposal the government will sell its entire 50.79% stake in NSL to strategic investors.  The 10% share in the NSL will be retained by NMDC. The 39.21 % shares of the NSL will be sold to the public and the company will be listed on NSE and BSE. 

The entire disinvestment process will be handled by the Department of Investment & Public Asset Management (DIPAM).

Disinvestment 

When the Central Government or the State Government sell its equity shares in Public sector companies, or company's assets to a private company or person is called as disinvestment in India 

Strategic Disinvestment: 

When the government decides to transfer the ownership and control of a public sector company to some other entity, either private or public, the process is called strategic disinvestment. 

DIPAM (Department of Investment and Public Asset Management)

It comes under the Union Ministry of Finance, Government of India 

It was earlier called the Department of Disinvestment which was later renamed as Department of Investment and Public Asset Management in 2017.

Function 

It deals with all matters relating to management of Central Government investments in equity including disinvestment of equity in Central Public Sector Undertakings. 

The Four major areas of its work relates to Strategic Disinvestment, Minority Stake Sales, Asset Monetisation and Capital Restructuring.