The government, which will divest its 5 percent stake in Steel Authority of India (SAIL) Friday, has fixed the floor price at Rs 83 per share.
The government, which has 80 percent stake in SAIL, plans to sell up to 206.5 million shares through an auction on the stock exchanges. Through this, the government hopes to rake in Rs 1500-1700 crore.
"Government expects to garner Rs 1,500 crore to Rs 1,700 crore from SAIL disinvestment. Floor price will be Rs 83 and retail investors will get a discount of 5 percent," an official said after a meeting on SAIL disinvestment in the finance ministry.
The SAIL offering would be the first PSU share sale under the new government, which targets to raise Rs 43,425 crore through share sales in various state-owned firms during the ongoing fiscal.
Retail investors would get a discount of 5 percent to the bid price in the SAIL offering.
As much as 10 percent of the offered shares has been reserved for retail investors, who can buy shares worth up to Rs 2 lakh in the share sale. A minimum of 25 percent of the issue size would be reserved for mutual funds and insurance companies.
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 government has lined up a host of PSUs to pare its holdings. The disinvestment plan includes 5 percent stake sale in ONGC, 10 percent in Coal India and 11.36 percent in NHPC.
HSBC Securities, Deutsche Equities, JP Morgan India are among the six merchant bankers advising the SAIL stake sale. While the new government assumed power in late May, there has been no PSU share sale so far in the current fiscal. During the previous 2013-14 fiscal, government has raised Rs 1,500 crore from sale of SAIL shares while the entire disinvestment proceeds stood at over Rs 16,000 crore.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
