New Delhi, May 19 (PTI): State-run Rashtriya Ispat Nigam Ltd (RINL) has submitted the draft red herring prospectus with Sebi to divest 48.898 crore shares, or a 10 per cent stake, through an initial public offering (IPO).

The IPO is part of the government’s divestment plan to raise Rs 30,000 crore during the current financial year through stake sales in state-run companies.

“The objects of the offer are to carry out divestment of 488,984,620 equity shares by the selling shareholder and to achieve the benefits of listing the equity shares on the stock exchanges. Our company will not receive any proceeds from the offer and all proceeds shall go to the selling shareholder,” RINL said in the draft red herring prospectus.

The issue price will be determined through the book building route. It will offer up to a five per cent discount to retail investors and employees.

RINL is the second-largest state-run steel maker in the country producing three million tonnes per annum (mtpa) at its lone facility at Visakhapatnam. The capacity is being raised to 6.3 mtpa in the current fiscal.

UBS Securities India and Deutsche Equities (India) are the book running lead managers to the issue, while Karvy Computershare will act as the registrar.

The proposed share sale will also help RINL in retaining its Navratna status, which was accorded on November 16, 2010, subject to the condition that it would get listed in two years (from the date of acquiring the status).