Bidding opens Friday for govt’s Rs3,000 cr SAIL divestment

A panel of union cabinet ministers today approved the sale of a 10.8-per cent stake in government-owned Steel Authority of India Ltd (SAIL) - the nation's largest steel producer - through an auction to be launched on Friday.

The empowered group of ministers (EGoM) on disinvestment, headed by finance minister P Chidambaram, have decided on the pricing of the share sale, which at current prices is worth close to Rs3,000 crore.

The base price would be made public after the close of market hours on Thursday. The sale will reduce the government's stake in SAIL to 75 per cent.

''The SAIL OFS (offer for sale) has been approved by the EGoM. The issue will hit market on 22 March," disinvestment secretary Ravi Mathur told reporters in New Delhi today.

He further said the stock exchanges would be informed about the details of the stake sale later today.

The department of disinvestment has already held road shows in Singapore, Hong Kong, the US, the UK and continental Europe for the proposed SAIL disinvestment.

The merchant bankers for the share sale include SBI Caps, Kotak Mahindra and Deutsche Bank. Post stake sale, the government's stake would come down to 75 per cent.

For the third fiscal quarter ended 31 December 2012, SAIL reported a 23-per cent decline in net profit at Rs484 crore from the year-ago period, mainly due to lower net sales realisation amid subdued market conditions.

The Cabinet Committee on Economic Affairs had in July last year approved a 10.82 per cent disinvestment in SAIL out of government's 85.82 per cent stake through the OFS route.