MMTC may go abroad in search for NINL partner

NEW DELHI: India’s largest trading company, MMTC, is ready to look overseas for a strategic partner for Neelachal Ispat Nigam if it does not get a good offer from Indian state-owned companies. “Maybe the next best thing for MMTC and NINL will be to have a global tender, but the government will have to take a call on that,” MMTC CMD Sanjiv Batra told ET.

MMTC has a controlling 49.9% stake in the pig iron manufacturing company. Orissa government has a 26% stake and the balance is held by other public sector stakeholders, including Bharat Heavy Electricals, NMDC and Mecon.

The over $7-billion MMTC had last year rejected public sector steel giant SAIL’s bid to acquire NINL on the ground that the price offered was too low.

Two other central government-owned companies, Rashtriya Ispat Nigam and National Mineral Development Corporation, have subsequently expressed interest but MMTC is not happy with the valuation offered.

“We find the valuations too low, while the buyers find it too high,” Mr Batra said. KPMG had valued the company at about Rs 100 per share while IFCI’s valuation was lower. MMTC, however, wants to exhaust its options with government companies before it moves on to others. “If NMDC or RINL give us a good price then we settle for them. If not, then we will see,” the CMD said.

The confusion over the ideal strategic partner has, however, not affected MMTC’s expansion plans for NINL. The company is going to pump in Rs 180 crore with the Orissa government coming up with an additional Rs 85 crore to expand NINL’s capacity by 1 million tonne. “We had been making pig iron, now we will also make billets,” Mr Batra said.