New Delhi: A planned share sale in state-run Steel Authority of India (SAIL) has been put off to next fiscal year that begins in April, said steel minister Beni Prasad Verma on Friday, citing unfavourable market conditions.
SAIL had previously said the share sale could be launched by end-March and the latest move makes it certain that India will not be able to meet its Rs40,000 crore share sale target set for this fiscal year.
A share sale in state-run refiner Indian Oil Corp (IOC) has also been delayed to the next fiscal year, but state-run explorer Oil & Natural Gas Corp (ONGC) has said it would launch a share sale in mid-March.
Separately, SAIL is planning to set up a 3-million-tonne steel plant in Mangolia at a cost of $3 billion, the steelmaker’s chairman said.
The government is selling 5% in India’s largest domestic steelmaker as part of a wider plan to sell stakes in state-run firms to cut its fiscal deficit and garner funds for the poor.
SAIL will issue an equal number of new shares to fund further expansions.
But market conditions have turned with the Bombay Stock Exchange (BSE) down more than 11% this year mainly on foreign fund outflows of $1.7 billion. SAIL shares have lost 12.2% this year.
“There is little time left for the issue this fiscal year,” steel minister Beni Prasad Verma told reporters on the sidelines of an industry conference.
SAIL chairman C. S. Verma, who was present at the same event, said the timing of the offer would be decided based on market conditions.
SAIL’s share sale had been delayed after the government last month issued notices to some of the shortlisted banks for the offering, asking if there had been any conflict of interest, after they also managed rival Tata Steel’s $770 million share sale.
Verma, who is also the chairman of state-run International Coal Ventures Ltd (ICVL) consortium, said the consortium might consider bidding for “prospecting rights” of mines owned by BHP Billiton in Africa.
Shares in SAIL closed 3.6% down at Rs160.15 in a Mumbai market that fell 1.6%.