Govt approves SAIL divestment through auction; may fetch Rs 4K crore

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The government has approved disinvestment of 10.82 per cent stake in Steel Authority of India (SAIL) through auction route.

"The Cabinet Committee on Economic Affairs has approved the disinvestment of 10.82 per cent equity of SAIL out of Government of India shareholding of 85.82 per cent through an Offer of Sale of shares through stock exchanges," an official release said on Friday.

The stake dilution is likely to fetch the exchequer in excess of Rs 4,000 crore, as per the current share price of the company in the domestic bourses.

Following divestment, government's stake in the country's largest steel maker would come down to 75 per cent, the release added.

The Cabinet Committee on Economic Affairs approved the proposal, mooted by the Department of Disinvestment, at a meeting held last evening.

SAIL's paid-up equity capital, as on March-end, stood at Rs 4,130.53 crore.

The share sale proposal of the government in SAIL is part of its Rs 30,000 crore mop up target for the current fiscal through disinvestment in state-run firms.

However, due to the poor market conditions, it has not been able to launch the disinvestment programme for the current fiscal so far.

It recently decided to put on hold the initial public offer (IPO) of Rashtriya Ispat Nigam Ltd (RINL) on volatility in the markets and lukewarm response of prospective investors in the roadshows held last week.

The RINL IPO was supposed to kick start this year's share sale programme of the government. Hindustan Aeronautics, BHEL, National Aluminium Company (Nalco), Hindustan Copper and Oil India are some of the other PSUs which are on government's disinvestment radar in 2012, besides SAIL and RINL.