ONGC ready for over Rs11,000 share sale, govt to decide timing

The follow-on public offer, through which the government plans to sell 5% or 427.77 million shares, was to open on 20th September, but has been put off days ahead of its opening. No new dates have been communicated

New Delhi: State-owned explorer Oil and Natural Gas Corporation (ONGC) on Tuesday said it is ready for the Rs11,500 crore share sale but the call on its timing will have to be taken by the government, reports PTI.

"The government of India (which plans to sell 5% of its stake in ONGC through the follow-on public offer) has to take a call. We are prepared,” ONGC chairman and managing director Sudhir Vasudeva told reporters here.

The government had on 15th September postponed the FPO owing to market uncertainties.

“The market has been behaving erratically,” he said, “The government has to take a call (on the FPO).”

The follow-on public offer (FPO) was to open on 20th September, but has been put off days ahead of its opening. No new dates have been communicated.

The government plans to sell 5%, or 427.77 million shares, through the offer.

After the FPO, the government’s stake in ONGC will come down to 69.14% from the current 74.14%.

The FPO was originally planned in 2010-11, but the launch was later deferred to 5th April, as the company did not have an adequate number of independent directors on its board to meet market regulator Securities and Exchange Board of India’s (SEBI) listing norms.

It was then rescheduled for 5th July, but was again deferred due to adverse market conditions.


NABARD funding for rural infra crosses Rs1 lakh crore mark

The disbursal includes loans to 28 states and the union territory of Puducherry as well as to the National Rural Roads Development Agency to support the rural roads component of Bharat Nirman

Mumbai: Loans disbursed by the National Bank for Agriculture and Rural Development (NABARD) to state governments crossed the Rs1,00,000 crore mark and stood at Rs1,02,844 crore as on 30th September, reports PTI.

NABARD has crossed a disbursement of Rs1 lakh crore for the creation of rural infrastructure in the country from out of its Rural Infrastructure Development Fund (RIDF), a statement issued here said.

The disbursal includes loans to 28 states and the union territory of Puducherry as well as to the National Rural Roads Development Agency to support the rural roads component of Bharat Nirman, the release said.

Some of the states which availed themselves of maximum financial support from NABARD for rural infrastructure are Andhra Pradesh (Rs9,711 crore), Uttar Pradesh (Rs7,984 crore), Gujarat (Rs7,324 crore), Tamil Nadu (Rs6,523 crore), Madhya Pradesh (Rs5,464 crore), Maharashtra (Rs5,493 crore), Rajasthan (Rs5,406 crore), West Bengal (Rs4,694 crore) and Karnataka (Rs4,406 crore).

Funds of Rs1.03 lakh crore were disbursed to states against 4.48 lakh projects worth Rs1.28 lakh sanctioned to them over 31 broad activities as per the infrastructure requirements in the rural and agricultural sectors.

Maximum funds were utilised for irrigation and agriculture (40%), followed by rural roads (33%), rural bridges (12%), rural drinking water supply (9%) and social sector (6%).

The loans are given to state governments for creating infrastructure not only to boost demand for agricultural credit but also to enhance the productivity of credit.

RIDF was set up with NABARD by the government of India in 1995-96 with an initial corpus of Rs2,000 crore. The funds were sourced by the Reserve Bank of India (RBI) from scheduled commercial banks in proportion to the extent of their shortfall in agriculture lending.

For the current year (under RIDF XVII), an amount of Rs2,000 crore has been earmarked specifically for creation of warehousing infrastructure in different states.


Iron ore shortage: Steel minister demands immediate hike in export duty

Steel minister Beni Prasad Verma opined that export duty on iron ore be hiked to 30% immediately in order to resolve the shortage of the raw material to domestic steel producers

New Delhi: Concerned over severe shortage of iron ore after the ban on mining in Karnataka, steel minister Beni Prasad Verma on Tuesday said the finance ministry should immediately increase the export duty on the raw material to 30%, reports PTI.

“If exports (of iron ore) stop, the problem of iron ore shortage in Karnataka and other states would get solved by and large,” Mr Verma told PTI in an interview.

Mr Verma had written a letter to finance minister Pranab Mukherjee two weeks ago to increase the duty by 10% to 30% to discourage iron ore exports.

In this year’s Budget, duty on exports of iron ore was increased to a uniform level of 20% on both forms of iron ore, lumps and fines, from 15% and 5% respectively.

“We want to get this (increase in export duty on iron ore) implemented immediately. I had written to them (the finance ministry) just at the beginning of the Karnataka crisis,” Mr Verma said. The continuous exports of the raw material is a big cause of concern, he added.

The government is also preparing a fact-sheet on problems being faced by steel companies. In about a week’s time, it will be presented to the Supreme Court through attorney general GE Vahanvati, Mr Verma said.

Since August, the steel and the allied industries in Karnataka are facing an acute shortage of iron ore after the apex court banned mining in the state.

The apex court later directed e-auction of 1.5 million tonnes of iron ore per month, lying in Karnataka mines, under the supervision of the court-appointed panel.

The Supreme Court also allowed state-run NMDC, the only company allowed to do mining in the state, to e-auction its iron ore as well 1 million tonnes in a month

The industries in the state, however, feel auctioning of iron ore is not helping them as the prices skyrocket during auctions, while there are no takers for low grade ore (iron ore fines).

Karnataka accounts for almost 25% of the total domestic steel production in a year. Besides, it contributed nearly 20% to the annual iron ore output.

Meanwhile, JSW Steel, which runs a 10 million tonnes per annum plant in Karnataka, has assured its customers through a public announcement that it is ‘working relentlessly’ to meet the supply requirements.

If necessary, the company would meet the demands of customers through its associate company JSW Ispat Steel, JSW Steel said, adding that its Vijayanagar plant is being run at 30% capacity.

In 2010-11, iron ore exports from the country had come down by 20% to 97.6 million tonnes (MT) vis-à-vis 117 MT in 2009-10, a data gathered by mining industry body FIMI showed.




5 years ago

Export duty hike on iron ore will not solve anything. Steel mills just have to learn to pay the price and buy the ore. Why would it be exported if domestic users paid the market price. If a firm in China, japan, Korea or Europe can buy it at the export price and haul it for the huge distance, why cannot domestic mills pay the price for the ore? Rather, the steel ministry should press removing import duty on imported steel for allowing import of steel to make it abundantly available to the domestic users as overseas producers like China can produce steel more cheaply than India despite importing ore and use domestic coke. This would conserve our high grade iron ore resources, now consumed by domestic mills, for future use and provide a competitive edge to domestic industry for using cheap steel rather having to use high priced steel from domestic mills currently.

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