Steel Authority of India Ltd and Hindustan Copper Ltd have independently shelved plans to raise capital by fresh issue of equity shares in a follow-on public offer (FPO).

Although the fresh equity issuances by these two companies have been dropped, the proposed divestment transactions are very much on the table and could fructify during this fiscal if the market conditions improved, a top disinvestment department official has said.

The Cabinet Committee on Economic Affairs had last year separately given its nod for disinvestment of Government shareholding of 10 per cent each in SAIL and Hindustan Copper. The divestments were to be put through along with the fresh issue of capital to be issued by them.

Now both the companies have decided not to issue fresh equity shares as they do not require funds. This has been conveyed to the disinvestment department, which is looking into these proposed transactions afresh in the wake of the change in the stance of the companies, the Disinvestment Secretary, Mr Mohammad Haleem Khan said here on Wednesday.

“In both the cases, the disinvestment by the Government and the fresh issue of equity shares have been de-linked,” he said.

Mr Khan said that any revision of plans for these two transactions (SAIL and HCL) would require CCEA assent and the disinvestment department was yet to take the revised proposals to the CCEA. .

In April last year, the CCEA had approved divestment in SAIL through offer for Sale of Government's equity shareholding of 10 per cent of paid-up capital in conjunction with the issue of fresh equity of 10 per cent of SAIL's paid-up capital, in two distinct tranches each comprising 5 per cent offer for sale and 5 per cent issue of fresh equity.

For Hindustan Copper, the CCEA had in June last year approved divestment of 10 per cent of paid up capital of the company out of Government's total shareholding along with issue of fresh equity of equal size by the company in the domestic market. The Centre currently has 99.59 per cent stake in Hindustan Copper Ltd. As per the earlier plan, the Government's shareholding in Hindustan Copper was to come down to 81.45 per cent.

Now, the disinvestment department is considering revising the proposal to sell 10 per cent equity of Hindustan Copper out of Government shareholding only.

On the follow-on public offer (FPO) of Oil and Natural Gas Corporation (ONGC), the disinvestment department has said that all the preparations have been completed and the issue is likely to hit the market in November or December this year.

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