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The government on Friday said state-run SAIL’s proposed Rs 8,000-crore follow-on public offer, which has got delayed due to issues with merchant bankers, will now hit the capital markets in March.
“In present conditions, SAIL FPO is possible by the fiscal-end. We are looking at that, but we will have to take market conditions into account,” the Steel Secretary Mr P K Misra told reporters here on the sidelines of a conference on metals and minerals. The issue was earlier planned to hit the markets by the middle of the month.
“Issues like market conditions, FPO of ONGC, etc, will be considered before deciding a final date for the Maharatna firm’s share sale,” he added.
When asked whether the controversy surrounding the four merchant bankers has been the reason for delay in hitting the markets, the Steel Secretary said: “I agree that the FPO has got delayed a little bit due to it (the merchant bankers’ issue) but we have to consider market conditions as well.”
He added that “Our effort is that government gets maximum revenue from the share sale. We have to protect the government’s interests before hitting the markets.”
Mr Misra further said that “the bankers have been asked to give an undertaking in a week that there is no clash of interests and they are committed to us. Then, they can continue“.
Last month, SAIL had issued notices to four investment bankers — SBI Caps, Kotak Mahindra, Deutsche Bank and HSBC — for taking up a similar job with the competitor Tata Steel, whose FPO concluded on January 21 and was subscribed over six times.
The four banks had come under government’s line of fire for their action, as they were appointed by the state-run company in September, 2010, much ahead of Tata Steel’s decision to hit the capital markets.
The whole issue stirred up speculations that SAIL’s share sale programme may not happen this fiscal.
The Department of Disinvestment, under the Ministry of Finance, on other hand is keen to complete the FPO as scheduled to ensure that the government meets the target of garnering Rs 40,000 crore from sale of equity in PSUs.
The government intends to sell its 5 per cent stake in the company to raise an estimated Rs 4,000 crore. The steel giant would issue fresh equity of the same proportion to raise a similar amount.
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