SAIL FPO may hit capital market by January-February

SAIL FPO may hit capital market by January-February

New Delhi: State-run SAIL’s follow-on public offer is likely to hit the capital market by January-February and the draft prospectus for the issue will be filed by December, chairman C. S. Verma said on Thursday.

“In the next two weeks, we will kick-off the meeting with investment bankers on the FPO. In early December, we will be in a position to prepare a Draft Red Herring Prospectus and then later on, will file the DRHP," Verma told reporters here.

“The FPO is expected by January-February," he said. The state-run steel major hopes to raise Rs8,000 crore from the first phase of the 20% share sale programme. In the first phase, the government plans to divest 5% of its stake in the company, while the steel giant will issue additional shares equivalent to a 5% stake.

Another 10% stake will be sold under the second phase of the FPO, the timing of which will be decided later.

The two-phase FPO may help raise a total of Rs16,000 crore, steel minister Virbhadra Singh had earlier said.

At present, the government holds a stake of a little over 85% in SAIL and post-FPO, its equity in the company is expected to go down to about 69%.

SAIL wants to part-fund its Rs70,000 crore capacity expansion programme with the proceeds from the share sale, while for the government, the stake dilution will help attain its disinvestment target of Rs40,000 crore for this fiscal.