Print article
India on Thursday approved a 20-percent stake sale in state-run Steel Authority of India Ltd (SAIL), the country's top domestic maker of the alloy, through a follow-on public offer.
The sale will happen in two tranches, with each tranche having a 5 percent government stake and a 5 percent fresh equity issuance. The first tranche is expected to fetch the government $1.8 billion at the current market price of around 244 rupees ($5.45) per share.
"After (the sale of) both tranches are completed, government stake would be 69 percent," Home Minister P. Chidambaram said.
The federal government hopes to raise around $9 billion through stake sales in state-run firms in the 2010/11 fiscal year that began on April 1.
The government has also lined up share sales in other state-run firms such as utility Satluj Jal Vidyut Nigam Ltd, Engineers India Ltd and state-run miner Hindustan Copper Ltd in the current fiscal year.
The government had set a target from stake sales of around $5.6 billion in the 2009/10 fiscal year that ended on March 31, but fell short of it due to lukewarm response to issues from top power producer NTPC, oil and gas exploration major Oil India Limited and top miner NMDC.
The government is banking on proceeds from stake sales to meet its fiscal deficit target of 5.5 percent of gross domestic produce for the fiscal year 2010/11.