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SAIL Stake Sale On March 22, Scrip Hits Yr's Low

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The government will sell its 5.82 per cent stake in steel-maker SAIL on Friday, 22 March 2013 through the offer for sale (OFS) route, which can rake in about Rs 1,564 crore at 20 March's closing price.

The company, which got the nod of the Empowered Group of Ministers earlier in the day, will announce the floor price for the offer after the closing of the market hours on Thursday, 21 March, SAIL said in a communication to the exchanges.

SAIL's scrip touched a year-low on the BSE at Rs 64.05 during the intra-day trade in the BSE. However, it recovered later to settle at Rs 65.05, down 0.61 per cent over the previous closing.

At Rs 65.05 per share, government's 5.82 per cent stake or 24,03,96,572 shares in the company could fetch Rs 1,564 crore from the issue, if fully-subscribed.

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

The merchant bankers for SAIL share sale include SBI Caps, Kotak Mahindra and Deutsche Bank. Post stake sale, the government's stake in SAIL will come down to 80 per cent.

An inter-ministerial panel on Wednesday, 20 March, 2013, cleared a 10.82 per cent stake sale in Indian steel major SAIL and decided that the issue will hit the markets on Thursday, 21 March, said a top finance ministry official.

The Empowered Group of Ministers on Disinvestment, headed by Indian Finance Minister P Chidambaram, met and decided on the pricing of the share sale. The base price would be made public only after the close of market hours Thursday (March 21).

In early trade Wednesday, Steel Authority of India Limited (SAIL) scrip touched a year-low at Rs 64.05 on the Bombay Stock Exchange. It was later trading at Rs 65.80, up 0.53 per cent on the BSE. At the current market price, a 10.82 per cent stake sale could fetch government around Rs 2,500 crore.

"SAIL OFS (offer for sale) has been approved by EGoM. The issue will hit market on March 22," Disinvestment Secretary Ravi Mathur told reporters here.

He further said the details of the SAIL stake sale would be informed to the stock exchanges later in the day.

The Department of Disinvestment (DoD) has already held roadshows in Singapore, Hong Kong, US, UK and continental Europe for the proposed SAIL disinvestment. SAIL comes under the administrative control of Steel Ministry.

The merchant bankers for SAIL 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 quarter ended December 31, 2012, SAIL reported a 23 per cent decline in net profit at Rs 484 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 10.82 per cent disinvestment in SAIL out of government's 85.82 per cent stake, through the OFS route.

(Agencies)