Steel Ministry looking at merging small PSU units with bigger ones

NEW DELHI: With eight companies under its administrative control, Steel Ministry has started discussions on merging smaller units with the bigger PSUs, including MSTC with Ferro Scrap Nigam Ltd (FSNL).
"Our secretary has directed to study the feasibility of merger of MSTC and FSNL. A discussion is going on in Ministry regarding smaller units," the ministry informed the Standing Committee on Coal and Steel.

The committee, which tabled its report in the Lok Sabha today, said the issue of merger of small units came up for discussions during oral evidence.

"In a post evidence reply, the Ministry have informed the Committee that feasibility of merger of smaller PSUs would be examined taking into account the desirability, shareholding pattern, functions and other aspects of the larger entities," the report said.

Steel Ministry has eight companies -- SAIL, RINL, NMDC, Moil, KIOCL, HSCL, MECON and MSTC -- under its administrative control. FSNL's 100 per cent equity is with MSTC. SAIL, RINL and NMDC are the major PSUs.

"The Secretary, Ministry of Steel, was candid enough to admit during evidence that a study has been conducted to look into the matter of repositioning of MSTC and FSNL," the report said.

MSTC is the holding company of FSNL. While FSNL is into selling of scrap; MSTC is in the business of e-commerce.

The Committee recommended that an extensive study should be undertaken regarding other PSUs under the administrative control of the Steel Ministry within the next three months.

Stating that it was concerned to observe that "at times the issue regarding chances of survival of smaller companies crops up", the Committee felt that "due to smaller units, a lot of expenditure is incurred under the non-plan head..."