India’s Vizag Steel requests delay to IPO after explosion at plant

Rashtriya Ispat Nigam Limited (RINL), also known as Vizag Steel, has requested that the Indian government postpone its initial public offering (IPO) originally scheduled for the last week of July 2012.

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The public sector company was looking to generate $500 million from the sale of a 10% stake through the public offering.

“We have requested [the] postponement of the IPO until September/October,” the assistant general manager of corporate communications, BS Satyendra, told Metal Bulletin.

He said employee morale was low after an explosion and fire at a newly commissioned oxygen plant in one of the plant’s meltshops on June 13, which is now known to have killed 19 people. He added that “current market condition [are] not good for an IPO”.

“We will complete our expansion as per our schedule,” Satyendra said, when asked if the deferment of the IPO would have an impact on its expansion plans.

The government committee on economic affairs approved the sale of 10% of the state-owned company in January.

On May 18 2011, RINL submitted the draft prospectus with the Security Exchange Board of India (SEBI).

RINL currently has a capacity of 3.2 million tonnes and the authorities are planning to increase it to 6.3 million tonnes.

RINL produces rebar, squares, flat products, billets, pig iron, plain wire rods in coils I and plain wire rods in coils II products.