The government is banking on disinvestment of SAIL to meet the disinvestment target of Rs24,000 crore in the current fiscal. So far, it has raised over Rs22,300 crore through PSU stake sales
The Empowered Group of Ministers (EGoM) on Disinvestment, headed by Finance Minister P Chidambaram, which met in New Delhi today, cleared a 10.82% stake sale in steel major SAIL. The issue will hit the markets on Friday.
The base price would be made public only after the close of market hours tomorrow.
“SAIL OFS (offer for sale) has been approved by EGoM. The issue will hit market on 22nd March,” disinvestment secretary Ravi Mathur informed the media.
The Department of Disinvestment (DoD) has already held roadshows in Singapore, Hong Kong, US, UK and continental Europe for the proposed SAIL disinvestment. SAIL comes under the administrative control of steel ministry.
The merchant bankers for SAIL share sale include SBI Caps, Kotak Mahindra and Deutsche Bank. Post stake sale, the government's stake would come down to 75%.
For the third quarter ended 31 December 2012, SAIL reported a 23% decline in net profit at Rs 484 crore from the year-ago period mainly due to lower net sales realisation amid subdued market conditions.
The Cabinet Committee on Economic Affairs had in July last year approved 10.82% disinvestment in SAIL out of government’s 85.82% stake, through the OFS route.
However, the disinvestment plan could not be taken forward amid the dismal market conditions. The government had kept the issue on hold anticipating buoyancy in the market to return.
SAIL shares have not been part of the market rally during 2012. The stock, which touched a 52-week high of Rs115.90 on 17 February 2012, has been losing ground ever since talks of disinvestment began.
The government is banking on disinvestment of SAIL to meet the disinvestment target of Rs24,000 crore in the current fiscal. So far, it has raised over Rs22,300 crore through PSU stake sales.
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