The government is proposing to offload 5 percent stake in SAIL this month and provide more incentives to retail investors to increase their participation.
The government is proposing to offload 5 percent stake in SAIL this month and provide more incentives to retail investors to increase their participation.
The disinvestment of steel major SAIL is expected to fetch the government over Rs 1,700 crore.
"We are completing the roadshows of SAIL. If all goes right, the OFS will happen this month, a source privy to the development said.
The Department of Disinvestment will also decide on a "case to case basis" offering up to 20 percent quota for retail investors in Offer For Sale (OFS) and also offer them higher discounts to the floor price.
Also read: PSU share sales: 20% of issue for retail investors likely
The present retail investor quota in OFS is 10 percent, while 35 percent is reserved for them in the Follow on Public Offer (FPO).
According to sources, the government would also now announce the issue date two days prior to the OFS, while the floor price will be declared on the day prior to the issue.
The sale of 5 percent stake or about 20.65 crore shares of SAIL at the current market price of around Rs 83.20 a piece would fetch the exchequer over Rs 1,700 crore.
The Cabinet had in July 2012 approved a 10.82 percent stake sale in SAIL. Accordingly, the first tranche of disinvestment of 5.82 percent was completed in March 2013.
The Budget 2014-15 proposes to garner Rs 43,425 crore from PSU disinvestment, of which about 30 percent is expected to come in from 5 percent or Rs 18,000 crore stake sale in ONGC.
Besides a 10 percent stake sale in Coal India is also on the table which could fetch about Rs 23,000 crore and will make up for half of the disinvestment target.
Besides, the DoD is in the process of finalising a Cabinet note for a 11.36 percent stake sale in NHPC and 5 percent each in PFC and REC.
Under the OFS mechanism, at present a minimum of 25 percent of the shares offered are reserved for mutual funds and insurance companies.
The government has been using the OFS route for disinvestment of PSUs.
Market regulator Sebi had in January, 2013 permitted the promoters of top 100 companies to use the auction route or OFS route to dilute stake in listed companies. It also permitted OFS in those PSUs which were to meet the minimum 25 percent public holding norm.
SAIL stock price
On September 09, 2014, Steel Authority of India closed at Rs 83.20, down Rs 1.1, or 1.3 percent. The 52-week high of the share was Rs 112.90 and the 52-week low was Rs 47.00.
The company's trailing 12-month (TTM) EPS was at Rs 6.53 per share as per the quarter ended June 2014. The stock's price-to-earnings (P/E) ratio was 12.74. The latest book value of the company is Rs 103.30 per share. At current value, the price-to-book value of the company is 0.81.
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