Govt plans 20% sale in MOIL; IPO likely in November-end

The government is looking at selling 20 per cent stake in MOIL Ltd, formerly Manganese Ore Ltd, through an initial public(IPO) in November end.Commenting on the matter MOIL chairman and managing director Mr. K J Singh said, "We expect to get the Sebi (Securities and Exchange Board of India) approval for the IPO anytime now". As per the plans the central government will offload 10 per cent of its 81.57 per cent stake in the company, while the remaining 10 per cent will be offloaded equally by the state governments of Madhya Pradesh and Maharashtra, which hold 9.62 per cent and 8.81 per cent stake in MOIL, respectively. The IPO is expected to be launched by the end of November. Further it is worth noting that the public sector Mini-Ratna Company has taken up Rs 900-crore capital expenditure plan over the next 3-4 years period. Speaking on the development to the reporters on Wednesday, MOIL Chairman and Managing Director, Mr. K J Singh said, "We plan to expand value-added production capacity and to enter into joint ventures with Steel Authority of India (SAIL) and Rashtriya Ispat Nigam Ltd (RINL) to set up ferro alloy plants in Chhattisgarh and Andhra Pradesh". Elaborating on the matter he pointed out that major chunk of the funds i.e. Rs 768 crore will be used for expansion of its mining operations over the next 3-4 years period, by around 40 percent. Apart from expansion MOIL will also invest Rs 100 crore in its 50:50, joint venture with SAIL at Chhattisgarh, while another Rs 50 crore will be invested in a similar joint venture with RINL at Andhra Pradesh. Adding to the matter Mr. Singh pointed out that both the JVs are for setting up ferro alloy plants and will produce ferro manganese and silico manganese. The JV with SAIL will cost Rs 392 crore, while the JV with RINL will cost Rs 206-crore and both will be help in securing potential sources of demand for MOIL's high grade manganese ore in the future. Expressing his views further Mr. Singh said, "We are committed to maintaining our leadership position in the Indian manganese ore market by increasing our production capacity in line with demand growth, focusing on our value-added product line to capture industry trends, controlling costs and strengthening relationships with our customers".Further the company is also sending a team to evaluate acquisition opportunities in Turkey. Speaking on the matter MOIL director (production and planning), Mr. G P Kundargi said, "People in Turkey, South Africa and Zambia have approached us to sell manganese ore mines and we will be sending a team soon to Turkey to take matters forward". Adding to the matter he pointed out that manganese ore mines acquired abroad would meet the demand in India and hence the company will be sending teams to other countries also at later stage. It is worth noting that Manganese ore is an important input in steel making and its use is expected to grow as steel production increases. At present MOIL holds proven ore resources of 22 million tonnes (mt) and probable reserves of nearly 70 mt, apart from holding nearly half the market share in India.