SAIL or Steel Authority of India Limited which is a PSU and where the government of India holds 85.6 % shares has received the Cabinet approval for a further issue and divestment by the government. The clearance is for a two stage stake sail involving a FPO of 5% and a stake sale of 5% in both the stages. This effectively means that there would be a 10% fresh issue and the government stake would also reduce by 10%.
The present issued capital of SAIL is 4130.40 crs and the market capitalisation is Rs 97787.22 crs based on the close of Rs 236.75 on Thursday the 8th of April on the BSE. Post both stages of raising fresh equity and divestment by the government, the public shareholding would rise from the present 14.2% to 31% while the government stake sale would reduce their holding from the present 85.6% to 69%. The company would raise about 8000 crs in fresh capital and the government would receive a similar amount by stake sale. There is no time limit by when this deal is to be concluded but sources say that the first leg is likely in the July September 2010 quarter.
