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Steel Authority of India Ltd will file the red herring prospectus in May for its forthcoming follow-on public offer, which is expected to hit the market in the first quarter of the next fiscal.
“It may happen sometime in May,” the SAIL Chairman, Mr C.S. Verma, said when asked about the company’s plan to file the RHP.
He, however, refused to give any specific date for the FPO through which the company aims to garner about Rs 7,000-8,000 crore.
“We will try to bring it as early as possible... It will happen early next (fiscal) year but we are yet to make assessment of the market conditions,” Mr Verma told reporters here today on the sidelines of a conference on steel.
The much-delayed share sale of the Maharatna firm was earlier proposed to hit the market in February. However, volatility in the markets and a controversy surrounding its merchant bankers delayed the issue.
SAIL also expects that its RHP would be cleared by the Securities and Exchange Board of India on a fast track basis as it fulfils the criteria of having continuous profits in the last three years and a turnover or market capitalisation of over Rs 50,000 crore.
According to the Bombay Stock Exchange data, SAIL stocks have declined by about 15 per cent since the beginning of the year.
The Government plans to go for disinvestment in SAIL in two phases. In the first phase, it plans to raise Rs 4,000 crore by divesting five per cent stake as well as raise fresh equity of the same proportion.
In the second phase, which is yet to be announced, another 10 per cent stake sale would be undertaken by SAIL through the FPO route.
At present, the Government holds a stake of a little over 85 per cent in SAIL. Post-FPO, its equity in the company is expected to go down to about 69 per cent.
Aiming to raise Rs 40,000 crore through disinvestment in the current fiscal, the Government has mopped up around Rs 21,000 crore by diluting its stake in six companies — Satluj Jal Vidyut Nigam, Engineers India, Coal India, Power Grid, Manganese Ore India Ltd and Shipping Corporation of India.
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