SAIL share sale on Friday, retail investors to get 5% discount

Kicking off its disinvestment drive, government will sell its 5% stake in steel major Steel Authority of India Ltd (SAIL) on Friday to mop up about Rs.1,700 crore while giving retail investors 5% discount to bid price. The SAIL offering would be the first public sector undertaking (PSU) share sale under the new government, which targets to raise Rs.43,425 crore through selling shares in various state-owned firms during current fiscal. The SAIL scrip ended 4.67% lower at Rs.85.65 on the BSE, while the floor price for the offer-for-sale would be determined on Thursday. The sale of 5% stake or about 20.65 crore shares of SAIL at the current market price of Rs.85.65 apiece would fetch the exchequer over Rs.1,700 crore. As much as 10% 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% of the issue size would be reserved for mutual funds and insurance companies. “Retail investors will be allocated shares at a discount of 5% to the bid price entered by them,” an NSE circular said, adding that the final allocation price may be below the floor price. The Cabinet had in July 2012 approved a 10.82% stake sale in SAIL. Accordingly, the first tranche of disinvestment of 5.82% was completed in March 2013. The government has lined up a host of PSUs to pare its holdings. The disinvestment plan includes 5% stake sale in Oil and Natural Gas Corp. Ltd, 10% in Coal India Ltd and 11.36% in NHPC Ltd. HSBC Securities, Deutsche Equities, J P 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.Read more at: http://www.livemint.com/