New Delhi: A ministerial panel is likely to meet on 19 March to decide the floor price for sale of 10.82% stake in Steel Authority of India Ltd (SAIL) which is expected in the second half of March, steel minister Beni Prasad Verma said on Monday.
“It (disinvestment of government’s shares in SAIL) will happen after 15 March, the empowered group of ministers is likely to meet on 19 March (to decide the floor price of the issue),” he said here on the sidelines of launching a coffee table book, ‘Indian Saga of Steel’. He, however, declined to comment on the date of the issue, saying “it has not yet been fixed”.
The SAIL stake sale will happen though offer for sale (OFS) route, also known as auction of shares through stock exchanges.
The empowered group of ministers (EGoM), headed by finance minister P. Chidambaram, decides on the floor price of OFS.
The merchant bankers for the issue include SBI Caps, Kotak Mahindra and Deutsche Bank. Post stake sale, the government’s stake would come down to 75% in SAIL. At current market prices, the issue is likely to fetch “over Rs3,000 crore” to government’s disinvestment kitty, SAIL chairman C.S. Verma said.
The roadshow for the proposed share sale in SAIL will begin on 6 March, he said, adding that it will be held in five countries, including the US, Britain and Singapore.
“The roadshow is going to start from 6 March. One team is going to the US and UK and second team is going to Singapore, Hong Kong and Japan... I am hopeful that the issue will be completed by the end of this month,” he said.
The cabinet committee on economic affairs (CCEA) had in July last year approved 10.82% disinvestment in the steel major out of government’s 85.82% stake.
The company’s shares on Monday closed at its 52-week low level of Rs68.35 apiece on the BSE, down 4.47%.
In the budget 2013-14, the government had revised disinvestment target to Rs24,000 crore for the current fiscal against the original estimates of Rs30,000 crore. So far, the government has raised over Rs21,500 crore through stake sale in public sector companies. Disinvestment of 9.33% stake in trading giant Minerals and Metals Trading Corp (MMTC) through the OFS route is scheduled for 14 March. The issue is expected to rake in about Rs300 crore to the exchequer.