SAIL disinvestment : Govt planning an IPO

by khalid on 28/09/2009 · 4 comments

sail

The Steel Ministry has approached the Ministry of Finance to initiate the disinvestment process in SAIL. An IPO is also being looked at the talk between two ministries.

SAIL is the largest steel maker of India and as market is in greens zone, govt wants to reduce its holding but not less than 75%. The equity sale could go along with the proposed public issue.

The government currently owns 85.82% stake in SAIL. Besides, about 4.59% is with the Life Insurance Corporation and the rest is with the public. The CMP of SAIL is Rs 169.

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{ 4 comments… read them below or add one }

Taheri October 24, 2010

If SAIl is planning tto have a secondary IPO, what will happen to the existing 9.3% holding of the existing stockholders equity? Will the stock split at 3 to 1 or 4 to i. With the current price at Rs. 169.00, what will the IPO be priced at?

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khalid October 24, 2010

Hi Taheri
This proposed IPO will be a normal disinvestment process of the Government and existing shareholder will continue as the shareholder, there will be no stock split. IPO will be priced according to market condition and anyone can apply for these shares. Hope it would be clear to you.
Thanks for your visit.

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Taheri October 24, 2010

Does that mean that the govt. will reduce its own holdings, and that holding will be sold into the market, to increase the cash reserves of SAIL. Is that the objective?

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khalid October 24, 2010

Thats right, Government wants to reduce its holding to around 75% from existing 85.82 % through this proposed IPO which will be open in Jan to Mar 2011 quarter. Money raised will be divided 50:50 between Government and SAIL.

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