SAIL floor price set at Rs 63 per share, govt to raise Rs 1,514 cr

The government has decided to sell 5.82 per cent stake in the Steel Authority of India (SAIL) at a minimum price of Rs 63 apiece, a 1.41 per cent discount to closing price.

In an unusual move, a high powered ministerial panel met for the second time in two days to deliberate on the pricing of the offer-for-sale (OFS) as the stock slumped 8 per cent in past one week.

The Empowered Group of Ministers (EGoM), headed by Finance Minister P Chidambaram, is believed to have on Wednesday decided on the pricing of the issue and a formal announcement was expected after the close of market hours on Thursday.

But departing from the practice followed in previous disinvestments, the panel again met on Thursday apparently perturbed by the volatility in the stock.

"The EGoM has set the floor price for SAIL stake sale at Rs 63 per share," a top government official said. The government will sell 24.03 crore shares, or 5.82 per cent, stake through Offer for Sale (OFS) on Friday.

The stake sale will help the goverment raise Rs 1,514 crore.

Shares of SAIL closed at Rs 63.90, down 1.77 per cent on the Bombay Stock Exchange (BSE), trading at its four-year low level . The stock has lost more than 30 per cent since March last year.

"We need to keep market condition in mind," SAIL Chairman C S Verma said after the EGoM meeting on Thursday.

The EGoM had on Wednesday approved a 5.82 per cent stake sale in SAIL, scaling down from the 10.82 per cent for which the Department of Disinvestment (DoD) had Cabinet approval.

The government currently holds 85.82 per cent stake in SAIL.

The auction, if subscribed fully, would take the proceeds from disinvestment for the current fiscal to around Rs 23,800 crore, a tad less than the Rs 24,000 crore target set in revised estimates.

with inputs from PTI