Keen to bolster the wherewithal of its smaller behemoths to withstand the ongoing economic downturn, the Steel Ministry is increasingly banking on its bigger units to shoulder the responsibility. It has already asked NMDC to acquire 51 per cent stake in the ailing KIOCL and has constituted a four-member committee to suggest ways for similar moves in other PSUs.

“We have formally constituted a four-member committee in the ministry to suggest ways to revive our smaller PSUs like Mineral Sales Trading Corporation (MSTC) or Ferro Scrap Nigam Limited (FSNL) either through acquisitions or capital restructuring to help them sustain themselves. In the first case National Mineral Development Corporation (NMD) has agreed to enter into a strategic partnership with the Kudremukh Iron Ore Company Limited (KIOCL) by acquiring 51 per stake and infuse a fresh lease of life in the latter,” steel secretary Pramod Kumar Rastogi told The Indian Express. As of now, it is emerging that both the companies would have cross holding of each other’s shares wherein NMDC would have a majority stake in the Karnataka-based public sector unit. The committee set up by the ministry comprises ex-CMD KIOCL L Ganesan and ex-CMD Manganese Ore India Limited K L Mehrotra and two directors of the ministry. It is expected to submit its report within the next two months. Within the next 100 days, the ministry intends to finalise a partnership between Neelanchal Ispat Nigam Ltd (NINL) and Rashtriya Ispat Nigam Ltd (RINL).

Similarly, the committee would also delve into the fate of other smaller companies like FSNL, MSTC and Hindustan Steelworks Construction Limited (HSCL). Now HSCL is a classic case of being a prodigal PSU with no big company willing to own it up. SAIL is unwilling to acquire it, arguing there is no synergy between the two. Incidentally, the Board for Reconstruction of Public Sector Enterprises is said to have already approved the ministry’s plea to write off plan and non-plan loans worth Rs 1,000 crore with accrued interest as part of the PSU’s capital restructuring exercise.