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SAIL selloff gathers pace

New Delhi, March 9: The steel ministry will start the process of getting cabinet clearance for Steel Authority of India Limited’s follow-on public offer this week.

Over a period of two years, starting next fiscal, the PSU will sell 20 per cent of its equity to the public.

“The share-sale proposal of the Steel Authority of India Ltd (SAIL) will be sent to the Cabinet this week. Thereafter, the cabinet secretary will take a final call on it,” Atul Chaturvedi, steel secretary, told reporters today.

During 2010-11, the public sector steel behemoth will offer fresh equity of 5 per cent to the public, while the government will offload 5 per cent of its stake.

Another 10 per cent — 5 per cent government equity and 5 per cent new shares — will be given to the public in 2011-12.

“The first phase of flotation is expected in 2010-11 and the next in 2011-12, but both will depend on the market conditions,” Chaturvedi said.

Both SAIL and the government are expected to earn Rs 8,000 crore each from the selloff.

The government currently owns 85.82 per cent stake in SAIL, the Life Insurance Corporation of India, 4.59 per cent, while the rest is with the public.

SAIL may spend as much as Rs 13,000 crore to expand capacity in the next fiscal compared with a capital expenditure of Rs 10,350 crore in this financial year, chairman S.K. Roongta had said.

Meanwhile, the disinvestment ministry said there were no plans to sell shares in ONGC Ltd and Indian Oil as ambiguous fuel pricing was affecting their valuations.

“At the moment there is no proposal (for follow-on public offers of ONGC or IOC),” disinvestment secretary Sumit Bose said today. Oil secretary S. Sundareshan echoed Bose’s views.

The government owns 80.35 per cent in IOC and 74.14 per cent in ONGC.

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