Department of Disinvestment (DoD) on Monday held a meeting with Steel Ministry officials to discuss the 5 per cent sale of Government’s stake in Maharatna Steel Authority of India ltd (SAIl), a move which is to fetch Rs 19,000 crore.
The meeting which had been called by the DoD, is being seen a process towards kick starting the disinvestment exercise by the newly elected BJP Government. According to Sebi norms, there should be 25 per cent public float in state-owned entities, and in SAIl’s case it is currently 20 per cent. Once Government’s divests 5 per cent more from its stake, the steel maker will achieve the required percentage.
The Pioneer had first reported on June 23 about the meeting which is just a precursor for more such meetings as several other PSUs like NMDC and NHPC are in Government’s radar for stake sale.
Sources pointed out that the meeting was a preliminary one where the details regarding the stake sale were discussed and things are expected to move forward from this point.
The sale of 5 per cent stake or about 20.65 crore shares at the current market price would fetch the exchequer about Rs 1,900 crore.
In the interim Budget, the Government had announced to raise Rs 36,925 crore through stake sale in PSUs in the current fiscal. SAIl, with a market capitalisation of over Rs 38,450 crore, would be among the big-ticket divestments.
The Cabinet under the United Progressive Alliance (UPA) regime had approved divestment of 10.82 per cent stake in SAIl in 2012-13 fiscal. It had however trimmed the size of stake sale to 5.82 per cent, thereby raising over Rs 1,500 crore in March 2013.
The Government had since appointed merchant bankers for the share sale, which include SBI Caps, Kotak Mahindra and Deutsche Bank.
The Finance Ministry has already asked the DoD to complete the groundwork for stake sales in state-owned companies soon after the Budget to take advantage of the bull phase in the stock market. The benchmark 30-share BSE Sensex has gained 12 per cent so far in this financial year.