Govt to sell up to 10% equity in SAIL through offer for sale

Govt to sell up to 10% equity in SAIL through offer for sale

The government will sell up to 10% equity in Steel Authority of India or SAIL through an offer for sale slated for January 14 and January 15.

The government will sell 5% equity in the central public sector enterprise under the steel ministry while keeping the greenshoe option, or option to sell further equity of 5%, in case of an over-subscription.

“The floor price of the offer will be Rs 64 per equity share,” SAIL said in a statement to the Bombay Stock Exchange on Wednesday. The company’s scrip closed at Rs 74.7, 1.58% down from the previous day.

The OFS, which will be at a discount from the market price of the stock, will open on January 14 for non-retail investors and for retail investors on January 15. A minimum of 12.5% of equity shares will be reserved for retail investors, while 25% of the offer shares will be reserved for mutual funds and insurance companies.

The government holds 75% stake in SAIL. It had last sold 5% stake in December 2014.

The government is estimated to earn over Rs 2600 crore from the present sale. The proceeds will help in moving close to the divestment target of Rs 2.1 lakh crore set for FY 2020-21.

SAIL is India’s largest steel producer with an annual capacity of about 21 million tonne per annum (MTPA).

The company reported a consolidated net profit of Rs 437 crore in the July-September quarter for the ongoing financial year, on back of strong operational performance, versus a net loss of Rs 286 crore in the same quarter of previous fiscal. The company’s consolidated revenue from operations grew 20% to Rs 16,925 crore from Rs 14,128 crore in the year-ago quarter.

SAIL earlier posted 9% growth in crude steel output at 4.37 million tonne (MT) during October-December period of the ongoing fiscal year.

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