News Modi’s big disinvestment programme starts tomorrow with SAIL share sale

Discussion in 'News & happenings' started by BANHAMMER, Dec 4, 2014.

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  1. BANHAMMER

    BANHAMMER Teh Almighty BanHammer Staff Member

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    NEW DELHI: The government's 5 per cent stake in steel giant SAIL will be sold at a floor price of Rs 83 per share on Friday, which can raise Rs 1,500 to Rs 1,700 crore for the exchequer in the first disinvestment under the new regime.

    "Government expects to garner Rs 1,500 crore to Rs 1,700 crore from SAIL disinvestment. Floor price will be Rs 83 and retail investors will get a discount of 5 per cent," an official said after a meeting on SAIL disinvestment in the finance ministry.

    The SAIL offering would be the first PSU share sale under the new government, which targets to raise Rs 43,425 crore through share sales in various state-owned firms during the ongoing fiscal.

    Retail investors would get a discount of 5 per cent to the bid price in the SAIL offering.

    READ ALSO: Disinvestment in Coal India, ONGC, NHPC to fetch record Rs 45,000 crore

    [​IMG]
    A blast furnace in a SAIL plant in Burnpur, West Bengal.

    The floor price of Rs 83 per share indicates a 2.75 per cent discount to the closing price of SAIL scrip that ended 0.35 per cent down at Rs 85.35 on the BSE.

    The sale of 5 per cent stake, or about 20.65 crore shares, of SAIL at the current market price would fetch the exchequer about Rs 1,700 crore.

    As much as 10 per cent of the offered shares has been reserved for retail investors, who can buy shares worth up to Rs 2 lakh in the share sale. A minimum of 25 per cent of the issue size would be reserved for mutual funds and insurance companies.

    READ ALSO: Disinvestment target likely to be revised upwards

    The Cabinet had in July 2012 approved a 10.82 per cent stake sale in SAIL. Accordingly, the first tranche of disinvestment of 5.82 per cent was completed in March 2013.

    [​IMG]
    Finance minister Arun Jaitley with Prime Minister Narendra Modi.

    The government has lined up a host of PSUs to pare its holdings. The disinvestment plan includes 5 per cent stake sale in ONGC, 10 per cent in Coal India and 11.36 per cent in NHPC.

    HSBC Securities, Deutsche Equities, JP Morgan India are among the six merchant bankers advising the SAIL stake sale.

    While the new government assumed power in late May, there have been no PSU share sale so far in the current fiscal. During the previous 2013-14 fiscal, government has raised Rs 1,500 crore from sale of SAIL shares while the entire disinvestment proceeds stood at over Rs 16,000 crore.


    Source: Modi’s big disinvestment programme starts tomorrow with SAIL share sale - The Times of India
     
  2. JD666

    JD666 RAID Leader Staff Member

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    As long as this fixes the machinery and output, welcome move!
     
  3. BANHAMMER

    BANHAMMER Teh Almighty BanHammer Staff Member

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    I think privatisation and autonomy is good either way.
     

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