The Indian government has now decided to offload 5.82 percent stake in Steel Authority of India (SAIL), compared to 10.82 percent envisaged earlier due to adverse market conditions and opposition from the Steel Ministry. The government understood to have fixed Rs.66 apiece as the floor price, reports said.
In a filing to the stock exchanges late Wednesday, the company said that President of India - "the promoter of the company - proposes to sell up to equity shares of the 24,03,96,572 equity shares of the face value of Rs.10 each, representing 5.82 percent of the total paid up equity share capital of the company on March 22".
The offer will take place through a separate window on both, BSE and NSE between 9:15 am and 3:30 pm.
The Empowered Group of Ministers (EGoM), which met in the morning, decided to fix the floor price of SAIL OFS at Rs.66 per share, which was 2.17 percent higher than its Tuesday closing price, official sources said.
Post stake sale, the government's stake would come down to 80 percent.
The issue, scheduled for Friday through offer for sale (OFS) route, will be second disinvestment this month. The government could garner around Rs.1,587 crore at Rs.66 per share through this issue, if subscribed fully.
The SAIL issue, if subscribed fully, will also lead to government nearly meeting its revised disinvestment target of Rs.24,000 crore for the current fiscal, the highest ever realization on disinvestment front in a single year.
The government has raised over Rs.22,300 crore so far by selling part of its stake in some PSUs, including NTPC, NMDC, Nalco, Rashtriya Chemicals and Fertilizers.
The government already held roadshows in Singapore, Hong Kong, the US, the UK and continental Europe for the proposed SAIL disinvestment.
For the third quarter ended December 31, 2012, SAIL reported a 23 percent decline in its net profit at Rs.484 crore mainly due to lower net sales realization amid subdued market conditions.
The merchant bankers for SAIL share sale include SBI Caps, Kotak Mahindra and Deutsche Bank.
At the BSE, Steel Authority of India shares are currently trading at Rs.64.40, down 1.00 percent from the previous close.
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