Govt seeks bidders for FSNL strategic divestment


The government will divest its entire stake in Ferro Scrap Nigam Limited (FSNL) held through MSTC Limited in a strategic sale. The Centre will also give up management control in the profit-making central public sector enterprise under the steel ministry.

The department of investment and public asset management (DIPAM) has appointed BDO India Ltd as advisor for transaction and has asked interested parties to submit bids by 5 May. Shortlisted bidders will be informed by 25 May.

The Cabinet Committee on Economic Affairs had on 27 October 2016 given in-principle approval to disinvest entire equity shareholding held through MSTC in FSNL, through strategic disinvestment and transfer of management control.

FSNL is a Mini Ratna II CPSE, a 100% subsidiary of MSTC, incorporated in 1979 to provide steel mill services including processing steel mills slag for recovery of iron scrap and other metallics. The company had an authorised capital of 50 crore as on 31 March 2021, and paid-up share capital of 32 crore. The entire paid-up capital is held by MSTC.

The company has nine steel plants in India, and specialises in recovery and processing of scrap from slag and refuse generated during iron and steel making across different plants. It offers services for dig and haul of blast furnaces and steel melting shop slag at slag yards, processing of iron and steel skulls, mill rejects and maintenance scrap as per the specific requirements of its customers.

FSNL is the largest recycler in India in terms of the volume of scrap and slag handled across multiple plants. For FY21, the company reported a revenue of 352.74 crore and profit of 22.75 crore. For the quarter ended September 2021, revenue was at 101.78 crore and profit at 10.63 crore.

As on 30 September 2021, FSNL has a cash balance of 169.9 crore along with zero debt servicing obligation, according to the preliminary information memorandum issued by the government.

Proceeds of the disinvestment will flow into the next financial year, for which the government has set a target of 65,000 crore, lower than the 78,000 revised divestment target for FY22 which has not been met.