Steel Authority of India Ltd, the country's largest steel company, plans to float an overseas subsidiary to pursue its foreign expansion.
Confirming this, sources close to the development said the proposed move was in line with the ONGC model where the country's largest oil and gas company controls its foreign business through its foreign subsidiary ONGC Videsh.
However, the SAIL spokesperson, when contacted, said, "We have no comment on this."
A foreign subsidiary would keep the bureaucracy at an arm's length distance.
The momentum of looking at foreign business is a result of the recent acquisition bid made by private sector peer Tata Steel on Corus and subsequent pressure from the ministry to toe the line.
Union Steel Minister Ram Vilas Paswan recently asked SAIL top brass to look at international assets for expansion. At a recent meeting, Paswan said the PSU should adopt an aggressive strategy for expansion in the changing scenario.
SAIL sources said the PSU was actively looking to do business overseas, but refused to divulge any other details. SAIL chairman, S K Roongta had welcomed the Tata Steel-Corus deal and said that it showed the confidence of overseas market in Indian entrepreneurs.
It is not known whether SAIL is currently looking to acquire any steel asset, but the steel major has been on the lookout for raw material deposits in the mineral-rich foreign countries, for a while now.
The PSU is in discussions with a few companies for picking up stake in coal blocks and locations could be South Africa or Australia.
SAIL officials also visited Oman recently as part of a delegation and were exploring the possibility of picking up equity in limestone mines.
One of the advantages that SAIL would have for overseas steel acquisitions is that the company could leverage iron ore mines. The company has access to the largest iron ore belt in Asia, Chiria, estimated to have reserves in excess of 2 billion tonne.
Though SAIL claims that it was just about enough for its own brownfield and possible greenfield expansion in the domestic market, industry sources say that would be able to feed other companies, as well.
