Ebene Magazine – SAIL: Govt to sell up to 10% stake via OFS, sets floor price at ₹64/share en

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The central government has decided to sell up to 20.65 crore shares or 5% of total equity of Steel Authority of India Limited (SAIL) through an Offer for Sale, the company said on Wednesday. Additionally, the government also has an option to sell up to 20.65 crore share of SAIL. With this, the government would divest 5% equity in the firm with a 5% greenshoe option, DIPAM Secretary said.

The floor price has been set at ₹64 per share. The OFS for non-retail investors opens on Thursday. While for retail investors, it will start on Friday, DIPAM Secretary said.

The total OFS size has been calculated at 206,526,264 equity shares of the face value of ₹10 each (Base Offer Size), with an option to additionally sell up to 206,526,264 equity shares of the firm (over-subscription option), according to ministry of steel. With this, the total OFS size stands at 413,052,528 shares, which is calculated at ₹2,664 crore.

At least 12.5% of the offer shares will be reserved for the allocation to retail investors. Apart from this, the government mentioned that no single bidder other than mutual funds registered with SEBI will be allocated over 25% of the Offer Shares being offering in the offer. A minimum of 25% of the Offer Shares will be reserved for the mutual funds and insurance companies, the company said.

Apart from these, the government stated that the allocation to retail investors will be made based on Cut-off price — lowest price at which the offer shares are sold in the non-retail category based on all valid bids received on transaction day at stock exchanges.

DAM Capital Advisors Limited (formerly known as IDFC) and ICICI Securities Limited as brokers on its behalf. DAM Capital Advisors Limited will act as the settlement broker on behalf of the seller’s broker, SAIL said in the regulatory filing.

SAIL, under the Ministry of Steel, is India’s largest steel producer with an annual capacity of about 21 million tonne per annum (MTPA). The government holds 75% stake in SAIL. It had last sold 5% stake in the steel CPSE in December 2014.

SAIL earlier posted 9% growth in crude steel output at 4.37 million tonne (MT) during October-December period of the ongoing fiscal year. The company had produced 4 MT crude steel in the year-ago period, SAIL said in a statement. During the period under review, its total sales were at 4.32 MT, up about 6 per cent from 4.09 MT in the corresponding quarter of the preceding fiscal year.

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