The government will sell up to 10 per cent of stake held in Steel Authority of India through an offer for sale, in a move that’s expected to fetch Rs 2,600 crore to the exchequer in divestment receipts.
The government is selling 206.5 million shares or 5 per cent in the one of the largest steel-making companies with a floor price of Rs 64 a share. It has also kept the option to sell another 5 per cent if the issue is oversubscribed. The government’s stake post the sale will come down from 75 per cent to 65 per cent if the greenshoe option is exercised.
The 10 per cent stake sale in the steel maker could fetch the government Rs 2,600 crore in divestment receipts.
The issue will open for non-retail investors on January 14, and on January 15 for retail investors.
SAIL, that comes under Ministry of Steel, has an annual capacity of 21.4 million tonne per annum to produce crude steel.
With broad markets at record highs, the government is moving swiftly with stake sales and initial public offerings as it tries to meet its ambitious Rs 1.2 trillion target for the ongoing fiscal. The government is also expected to get about Rs 1,500 crore from IRFC IPO to be launched on January 18, the first one to make allotment for anchor investors.
DIPAM’s target for the ongoing fiscal also includes IPO of India’s largest insurer LIC and stake sale in IDBI Bank taking its cumulative target to Rs 2.1 trillion. IPO of LIC and IDBI stake sale is unlikely to be completed this year. The government has so far mopped up only Rs 13,844.5 crore in divestment receipts.