The Union ministry of commerce and industry has convened a meeting next week to discuss the possibility of maharatna PSU Steel Authority of India Ltd (SAIL) acquiring a stake in MMTC promoted Neelachal Ispat Nigam Ltd (NINL).

Talks would also be centred on NINL’s growth strategy. Steel PSU NINL’s plan to expand steel capacity from 1.1 million tonne per annum (mtpa) to five mtpa at Duburi (Odisha) has been marred by a slump in the steel market. NINL, the biggest producer, and exporter of pig iron were finding exports unviable due to cheaper supplies from China and Ukraine. The company has been posting losses since 2012-13 and closed last fiscal with a steep loss of Rs 334.53 crore.

“There was an older proposal by SAIL to pick up stake in NINL. The commerce & industry ministry is keen to ascertain if SAIL is still keen on pursuing the proposal. The equity by SAIL could be up to 26 per cent and in that case, MMTC has to dilute a portion of its stake”, said a highly placed government official in the know of the matter.

Currently, MMTC is the biggest shareholder in MMTC with equity of 49.78 per cent. Another nav ratan PSU National Mineral Development Corporation (NMDC) holds 12.87 percent. Two Odisha government PSUs- Odisha Mining Corporation (OMC) and Industrial Promotion & Investment Corporation of Odisha Ltd (Ipicol) have a combined stake of around 27 percent.

MMTC, however, is no hurry to accommodate SAIL as an equity partner in NINL. “We are waiting for our captive mine to commence operations and our expansion to take off. Till then, MMTC would continue to be the biggest stakeholder in NINL. At the time of expansion, we may think of inducting a strategic partner but we prefer to do it through an open, transparent tender’’, said a senior MMTC executive.