Selloff wave: Rajasthan will take its mining company public

Riding the disinvestment wave, the Rajasthan government has decided to hit the capital market with an initial public offering of its mining company with huge reserves of minerals in the state.

The state government plans to divest 10% of the share capital of Rajasthan State Mines and Minerals Ltd (RSMML). It had made a budget announcement in August.
It would be the second state government-owned mining company to hit the capital market after Gujarat Mineral Development Corporation, which got listed in October 1997.

RSMML is primarily engaged in mining and marketing of non-metal minerals such as rock phosphate, lignite, gypsum, limestone and other minor minerals.

According to the company website, the authorised share capital of RSMML stands at Rs80 crore and the paid-up share capital is Rs77.55 crore, which is divided into 7,75,51,500 shares of Rs10 each. The Government of Rajasthan holds 99.99% in the company and the rest is held by private shareholders.

For the year ended March 31, 2010, the company had a total income of Rs956 crore and profit after tax of over Rs111 crore.

Like most mining companies, RSMML has also diversified into energy sector and has set up a 106.3 megawatt (mw) wind power plant at Jaisalmer in Rajasthan and also has minor interests in bio-diesel.

RSMML was formed when the Government of Rajasthan took over a private company called Bikaner Gypsum Ltd in 1973. Later, in 1993, it amalgamated Rajasthan State Mining Corporation with RSMML to form four strategic business units — rock phosphate at Udaipur, lignite at Jaipur, gypsum at Bikaner and limestone at Jodhpur.

So far, rock phosphate is its flagship mineral and accounts for almost 95% of the indigenous demand, according to the company’s website.