SAIL hopes to execute follow-on offer
Talking to The Indian Express, SAIL chairman CS Verma said the perceived differences on the timing of the Follow-on Public Offer (FPO) have been sorted between the steel ministry and the DoD, and the FPO through the offer-for-sale route is back on the track.
ďIn any FPO there are bound to be issues like the timing of the offer in view of the prevalent market conditions and other concerns. After assessing the entire gamut of issues, all matters have been resolved and we are very hopeful of executing the FPO by March,Ē Verma said.
The government has decided to offload 10.82 per cent of its equity in SAIL which will lower its holding to 75 per cent. Pursuing its disinvestment agenda, the government hopes to mobilise around Rs 9,000 crore from the PSU which has a net worth of about Rs 39,000 crore.
The government hopes to mop up Rs 40,000 crore through divesting its stake in profitable PSUs but is wary of the fluctuating market conditions, which had held back SAILís public offer so far.
He said in the ongoing expansion and modernisation programme, SAIL will expand its production capacity to 18 million tonnes (MT) from the existing 14 MT by the end of current financial year by firing two of its blast furnaces at Burnpur and Rourkela plants within the next 3-4 months. SAIL is aiming to increase its market share to 30 per cent by 2020 and its capacity to 45 MT. However, the steel ministry is not enthused by SAILís performance and believes that the PSU could have done much better by adhereing to time-bound execution of its expansion plans. Steel minister Beni Prasad Verma has been critical of SAILís performance and had described it as a tardy one. He said the PSU has delayed its modernisation plans by one year and it was high time that it enhanced the pace of its expansion works. The expansion is being executed in various plants which so far has consumed nearly Rs 39,000 crore.
The steel minister has also expressed concerns on the companyís depleting sales and growing raw material insecurity.
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