SAIL sell-off: International roadshows to begin next week

Sep 03 2014, 09:31 IST
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Market experts say that if priced well, there will be interest in the divestment programme from both domestic and foreign institutional investors. (Reuters) Market experts say that if priced well, there will be interest in the divestment programme from both domestic and foreign institutional investors. (Reuters)
SummaryIt is expected that the SAIL divestment will be done through the OFS route as the process can be completed faster.

In a move to attract investors from abroad, global roadshows for divestment of 5 per cent stake in state-owned Steel Authority of India Limited (SAIL) is set to begin next week.

A source close to the development said that while the date for the launch of the issue has not been finalised and may happen sometime in the next couple of months, the roadshows in Singapore, Hong Kong, London, New York and Boston will begin in the coming week.

The government will begin its divestment program with SAIL and then follow it up with that of ONGC and Coal India, added the source. For the financial year 2014-15, the government has set a target of Rs 58,425 crore through disinvestment .

Investor sentiments are on a high after GDP numbers rose and the current account deficit (CAD) showed a decline in the first quarter ended June 2014. Following this, by Tuesday the Nifty and the Sensex breached the 8,000 and 27,000 mark respectively.

Market experts say that if priced well, there will be interest in the divestment programme from both domestic and foreign institutional investors.

The government will off-load a 5 per cent stake in Sail, which amounts to 20.65 crore shares. At the ongoing trading price of SAIL shares, the issue will fetch around Rs 1,750 crore.

In March 2013, the government had off-loaded 5.82 per cent shares (24 crore shares) of the company through offer for sale (OFS) and raised Rs 1,510 crore. At that time the share price of the firm was Rs 63. As a result of the rise in the markets, the shares of SAIL are currently trading at a level of Rs 84 at present.

It is expected that the SAIL divestment will be done through the OFS route as the process can be completed faster.

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