Union Government divested 5 percent stake in SAIL
The Union Government on 5 December 2014 divested its 5 percent stake in Steel Authority of India Ltd (SAIL).
The Union Government on 5 December 2014 divested its 5 percent stake in Steel Authority of India Ltd (SAIL). The government divested 20.65 crores shares of SAIL through offer for sale (OFS) through stock exchanges as per SEBI Rules and Regulation.
With the sale of 5 percent stake in SAIL at a floor price of 83 rupees per share, Union government mopped up around 1715 crore rupees.
As a result, the government stake in SAIL came down from present 80 percent to 75 percent meeting the SEBI norms on listing of public shareholding.
As per the Securities Contracts (Regulation) Rules of SEBI, minimum public shareholding in listed state-owned firms should be 25 percent and all the listed PSU norms has to comply with the norm by 21 August 2017.
Apart from this, as much as 10 percent of the offered shares were reserved for retail investors, who can buy shares worth up to 2 lakh rupees in the disinvestment. A minimum of 25 percent of the issue size was reserved for mutual funds and insurance companies.
The SAIL disinvestment is first PSU share sale of the fiscal year 2014-15 under NDA government led by Prime Minister Narendra Modi.
During the fiscal year 2013-14, government raised 1500 crore rupees from sale of SAIL shares while the entire disinvestment proceeds stood at over 16000 crore rupees.
The NDA government, after coming to power in May 2014, in September 2014 decided to raise 43425 crore rupees in the financial year 2014-15 through selling shares in Coal India Ltd (CIL), Oil and Natural Gas Corporation (ONGC) and National Hydroelectric Power Corporation (NHPC).
The NDA government's disinvestment plans include 5 percent stake sale in ONGC, 10 percent in CIL and 11.36 percent in NHPC.
Besides, the 5 percent stake sale formed the second tranche of the 10.82 percent stake sale in SAIL envisaged by the previous UPA government in July 2012. The first tranche of disinvestment of 5.82 percent in SAIL was completed in March 2013 when the government had mopped up 1500 crore rupees.