Shares of Steel Authority of India (SAIL) gained a percent on January 4 morning after the government decided to not go ahead with the privatisation of the firm's Salem plant for lack of bidder interest.
At 9.22 am, the stock was trading at Rs 119.65 on the National Stock Exchange, up 0.46 percent from the previous close. It hit a hit 52-week high of Rs 126 on January 1. In the past month, the state-owned company's stock has jumped over 26 percent against a 3 percent rise in the Sensex.
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The government said though multiple expression of interests (EoIs) were received and bidders were shortlisted but none of them wanted to proceed with the transaction.
"The government along with the approval of alternative mechanism has decided to annul the current EoI, thereby, terminating the present transaction," the Department of Investment and Public Asset Management (DIPAM) said.
For strategic disinvestment of Tamil Nadu-based plant, global EoIs were invited on July 4, 2019. Earlier, the government was forced to scrap strategic sale of SAIL's Visvesvaraya Iron & Steel Plant (VISP) in Karnataka due to insufficient bidder interest.
Analysts at ICICI Securities shared an "add" rating for SAIL with a target price of Rs 95 a share. "We believe further pairing of debt of Rs 22,000 crore by FY24-end and benefit of rail price revision for FY23/24 is likely to be higher as compared to FY22. This triggers will bring positives in sight for SAIL," the brokerage firm said.
SAIL's coking coal procurement structure would likely insulate it from the adverse impact of higher international price in Q3FY24, they said.
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