The much awaited Rs 8,000-crore follow-on public offer of state-run SAIL is likely to hit the capital markets by around June 14, while the steelmaker would file the prospectus for the issue by the end of this month.
“Red Herring Prospectus (RHP) is expected to be filed by the end of this month, while the FPO would hit the market around June 14. However, the exact dates will be finalised by the board in its meeting on May 23,” SAIL Spokesperson, Mr R.K. Singhal, told PTI.
SAIL Chairman, Mr C.S. Verma, last month had said that the FPO would hit the markets in early June.
The FPO of Steel Authority of India (SAIL), in which the government holds a little over 85 per cent, has failed to meet deadlines repeatedly since December last year due to unfavourable market conditions and problems with merchant bankers.
Optimistic on approval
According to the BSE data, the shares of SAIL have declined by about 19 per cent since January and on Monday also it closed at Rs 152.25 on BSE.
SAIL is also expecting that its RHP would be cleared by the market regulator SEBI on a fast track basis as it fulfils the criteria of having continuous profits in last three years and a turnover or market capitalisation of over Rs 50,000 crore.
However, delay in SAIL's FPO thwarted the achievement of the government's divestment target for the previous fiscal and it could only raise over Rs 22,000 crore against the target of mopping up Rs 40,000 crore through stake sale in state-owned firms.
The government has set a target to raise Rs 40,000 crore through disinvestment in state-run firms in the current fiscal as well. 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 government stake, while the company will raise fresh equity of the same proportion.
In the second phase that 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.