The government on Thursday fixed the floor price of SAIL shares at Rs.63 a piece for disinvestment of 5.82 per cent of its equity stake in the steel major through the OFS (offer for sale) route on Friday.
In a filing to the BSE (Bombay Stock Exchange), the government said “the floor price for the offer in terms of SEBI OFS circular shall be Rs.63 per equity share of Steel Authority of India Ltd”.
Going by the closing price of SAIL shares at Rs.63.90 on the BSE on March 21, the floor or offer price of the scrip works out to a discount of 1.41 per cent. With the government placing 24.03 crore SAIL shares on the block through OFS — ostensibly the last stake sale of its disinvestment programme in the current fiscal — the mop-up is expected to be at least about Rs.1,514 crore.
If fully subscribed, the SAIL OFS will take the total proceeds through disinvestment during 2012-13 to about Rs.23,800 crore. At this level, although it will be the highest-ever realisation through divestment in a single year, the overall mop-up will still fall marginally short of the revised target of Rs.24,000 crore set for the fiscal year.
The mop-up through sale of SAIL shares could have been more, but for the fact that the OFS has come at a time when the markets are on a tailspin on account of external and domestic factors. In fact, the BSE benchmark Sensex has witnessed an erosion of nearly 800 points in recent days owing to political uncertainty at home and weak European cues following the Cyprus banking and tax related crisis.
Following the downtrend on the bourses, SAIL shares slumped by about 8 per cent in about a week’s time.