Comments
The government will take a call on selling 10.82 per cent stake in SAIL after announcement of the steel major’s third quarter earnings early next month.
“We are waiting for SAIL’s third quarter earnings. The merchant bankers for the share sale feel that a better picture of the company’s fundamentals can be put forward before investors after the results,” a senior government official told PTI.
As per the disinvestment roadmap, the government plans to sale stake in SAIL in the current fiscal. The stake sale could help government reach the Rs 30,000 crore disinvestment target of the current year.
So far, the government has raised over Rs 6,900 crore through minority stake sale in PSUs this fiscal.
SAIL is currently trading around Rs 89.20 a share. At the current prices, 10.82 per cent stake sale could fetch about Rs 4,000 crore to the exchequer.
There have been differences over valuation of the steel major in the past as well and the department of disinvestment is not acting in haste to make SAIL hit the markets again.
“The steel sector has started showing signs of improvement and we hope that this will get reflected in the earnings of the company. So, the current valuations of the company could improve,” the official added.
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 shareholding through Offer of Sale (OFS) route.
However, it could not be taken forward amidst the subdued market conditions. The government has kept the issue on hold anticipating buoyancy in the market to return.
The government has selected merchant bankers for SAIL share sale, including SBI Caps, Kotak Mahindra and Deutsche Bank. The government’s stake would come down to 75 per cent post the stake sale.
Government officials have been meeting international investors and highlighting the Indian steel sector’s growth potential.
India’s steel-making capacity, which currently stands at around 90 million tonnes per annum (mtpa), is projected to grow to 200 mtpa by 2020, calling for an investment of $110 billion in the next six-seven years. However, they face a fund crunch to carry their plans forward.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.