The government is eyeing around Rs 3,500 crore through stake sale in Steel Authority of India Ltd (SAIL) by March-end to reach close to the Rs 30,000-crore disinvestment target for the current financial year.
The government is planning to sell 10.82 per cent of its stake in state-owned SAIL. At the current market price of Rs 78 per SAIL share, the stake sale could fetch around Rs 3,400 crore to the exchequer.
The Department of Disinvestment (DoD) is already planning roadshows in Singapore, Hong Kong, US, UK and continental Europe for the proposed disinvestment.
Sources said DoD has communicated to the administrative ministry that the process of roadshows can commence from the last week of February so as to be prepared with the stake sale process by end-March.
"SAIL stake sale is very much in our domain for the current fiscal. DoD is in talks with the Steel Ministry on how to go about it. We are looking to raise somewhere between Rs 2,700-3,500 crore," official sources said.
The government has so far this financial year raised Rs 21,500 crore through PSU stake sales, against the Budget target of Rs 30,000 crore. DoD Secretary Ravi Mathur had earlier said the government would raise around Rs 27,000 crore.
For the third quarter ended December 31, 2012, SAIL reported a 23 per cent decline in net profit at Rs 484 crore mainly due to lower net sales realisation amid subdued market conditions.
"SAIL financial results are on expected lines. We are thinking of doing the stake sale in the second half of March," sources said.
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 per cent.
There have been apprehensions that government might defer stake sale in SAIL to next financial year owing to tepid financial results and bleak performance of the steel sector. However, sources said the sale is unlikely to be deferred as the government is trying hard to achieve the disinvestment target to restrict fiscal deficit to 5.3 per cent of GDP this financial year.
The Cabinet Committee on Economic Affairs had in July last year approved 10.82 per cent disinvestment in SAIL out of government's 85.82 per cent stake, through the Offer of Sale (OFS) route.
However, it could not be taken forward amidst the subdued market conditions. The government has 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 Rs 115.90 on February 17, 2012, fell to its 52-week low of Rs 75.80 on September 5, 2012.