SAIL offer-for-sale plan
The government is planning to sell a 5 per cent stake in Steel Authority of India Ltd (SAIL) through an offer for sale, which could fetch about Rs 1,000 crore to the exchequer, an official said.
Officials from the department of investment and public asset management (Dipam) and steel ministry are planning roadshows in Singapore and Hong Kong for the SAIL stake sale. However, the Hong Kong roadshow might be called off because of the coronavirus outbreak.
The government holds a 75 per cent stake in SAIL. It had last sold a 5 per cent stake in the steel CPSE in December 2014.
“We are looking at a 5 per cent stake sale via an offer for sale (OFS), but we will assess investor demand in the roadshows,” an official said.
At the current market price, the government may raise about Rs 1,000 crore by selling a 5 per cent stake in the company. Shares of SAIL closed at Rs 48.65 apiece on Friday, down 0.51 per cent over previous close on the BSE.
The government may look to complete the transaction in the current fiscal as it strives to achieve the Rs 65,000-crore disinvestment target set in the revised estimates.
So far this fiscal, Rs 34,000 crore has been mopped up from the CPSE stake sale and the remaining Rs 31,000 crore has to come in by March-end.
For 2020-21, the government has budgeted to collect Rs 1.20 lakh crore from CPSE stake sales.
The government is also planning to sell a 10 per cent stake in Garden Reach Shipbuilders & Engineers Ltd (GRSE) through OFS, out of its shareholding of 74.50 per cent.
The stake sale would fetch about Rs 200 crore to the exchequer at the current market price.
Iron ore auction
SAIL has sought permission from Odisha and Jharkhand to auction about 70 million tonnes (mt) of fines or low-grade iron ore lying at its mines in the two states.
Depending upon the iron content, the ore can fetch a price of $40-45 a tonne to $62 a tonne, an expert said.
About 70mt of fines which SAIL was unable to use are lying at its mines in Odisha and Jharkhand, a source said.
For steel making, fines can be used through beneficiation and pelletisation, and SAIL does not have enough beneficiation and pelletisation capacity. So, it is not possible for it to consume these low-grade fines/ores for its steel plants.