The government holds 75 per cent stake in SAIL. It had last sold 5 per cent stake in the steel CPSE in December 2014.
The government on Wednesday said it proposes to offload up to 10 per cent stake in public sector steel manufacturer SAIL and the offer for sale (OFS) will open on Thursday. “Offer for Sale (OFS) in SAIL opens on Thursday (14.1.2021) for non-retail investors. 15th January (Friday) is for retail investors. GoI would divest 5% equity with a 5% greenshoe option,” Department of Investment and Public Asset Management (DIPAM) Secretary Tuhin Kanta Pandey tweeted.
The government holds 75 per cent stake in SAIL. It had last sold 5 per cent stake in the steel CPSE in December 2014. The floor price for SAIL OFS has been set at Rs 64 per equity share of the firm, according to a regulatory filing. “The total OFS size has been calculated at 20.6 crore shares of face value of Rs 10 each (base offer size), with an option to additionally sell up to 20.6 crore equity shares.”
With this, the total OFS goes up to 41.3 crore shares and government is expected to mobilise Rs 2,664 crore. This may help to bridge the government’s ambitious target of Rs 2.1 lakh crore through divestment in the current financial year. This includes Rs 1.20 lakh crore through CPSE stake sales, and the remaining Rs 90,000 crore from financial institutions. Hard-pressed to meet target, the government has lined up a Rs 4,600-crore initial public offering (IPO) of the Indian Railway Finance Corporation (IRFC), a public sector undertaking under the railways ministry.
The offer, opening on January 18, comprises up to 178.2 crore shares of face value of Rs 10 each. The IPO includes a fresh issue of up to 118.8 crore shares and an offer for sale of up to 59.4 crore equity shares by the President of India, acting through the Ministry of Railways. The government is expected to mobilise Rs 1,544 crore at the upper price band. According to the DIPAM, the government has so far raised Rs 28,298.26 crore from disinvestment proceeds. This includes Rs 14,453.77 crore received as dividend from state-owned firms. The remaining Rs 13,844.49 crore proceeds include Rs 1,065.37 crore from selling shares in NTPC share buyback.
The government is likely to miss its disinvestment target by a wide margin and the fiscal deficit is not likely to be anywhere near the target of 3.5 per cent of the GDP in 2020-21 (April 2020 to March 2021). While privatisation of firms such as Bharat Petroleum Corporation Ltd (BPCL) and Air India has been pushed to the next fiscal due to COVID-19-related delays, tax collections have been hit hard as restrictions imposed to curb coronavirus dented incomes all around.