The Government has fixed a floor price of Rs63 per share for the offer for sale (OFS) of Steel Authority of India ltd (SAIl), which is to hit the markets on March 22.
Planning to raise around Rs1,500 crore through selling its 5.82 per cent stake in the steel behemoth, the Government set the base price at a discount of 1.41 per cent over Rs63.90 - which was Thursday's closing price of SAIl in the Bombay Stock Exchange (BSE).
Government is selling 24.03 crore shares in SAIl through auction route, the last stake sale of its disinvestment programme for the current financial year.
The auction, if subscribed fully, would take the proceeds from disinvestment in this fiscal to around Rs23,800 crore, the highest ever realisation on disinvestment front in a single year. It is, however, a tad less than the revised estimates of Rs24,000 crore.
In a filing to the BSE, the Government said that “the floor price for the offer in terms of SEBI OFS circular shall be Rs 63 per equity share of Steel Authority of India ltd.”
The offer hits the market at a time when the bourses have been on a losing streak for five days. The BSE benchmark Sensex has suffered loss of nearly 800 points in these days amid political uncertainty and particularly weak European trends.
The decision on setting the floor price for the issue saw some unusual moves as a high-powered ministerial panel (empowered Group of Ministers led by P Chidambaram) met for the second time in two days to deliberate on the pricing with the company stock slumping 8 per cent in the past one week.
But departing from the practice followed in previous disinvestments, the panel met again on Thursday after a meeting on Wednesday, apparently perturbed over the volatility in the stock.