Government may sell 5 per cent stake in SAIL: Sources

Tags: SAIL, Companies
New government could sell a 5 percent stake in state-run Steel Authority of India Ltd, with a final decision expected next week, two sources directly involved in the process told Reuters.

Prime Minister Narendra Modi, who won a landslide election victory last month largely on his promise of economic growth, is expected to speed divestments to bolster revenue generation at a time of weak economic growth.

Former Finance Minister P. Chidambaram had set a target of raising $8.5 billion from share sales in the current fiscal year ending March 31, though that figure is not binding on the new government.

India's disinvestment department under the Finance Ministry will hold a meeting with Steel Ministry and SAIL officials on June 23 to discuss the sale, a top Steel Ministry official and a top SAIL official said on Tuesday. A five percent stake in SAIL would fetch more than $330 million based on the company's current share price of 97 rupees. The stock has risen about 13 percent over the past month against a 4.6 percent rise in the BSE Sensex. SAIL sold a stake last year when its stock price was in the range of 65 rupees.

"When is a right time to sale? Today it is better than what it was last year," the Steel Ministry official said.

A SAIL official said the proposed stake sale would also help it comply with Indian stock market rules requiring that publicly listed companies have an equity free float of at least 25 percent.

Both the officials declined to be named as the discussion is private. A SAIL spokesman could not be reached for comment.

Some advisers to Modi and Finance Minister Arun Jaitley have suggested loosening the purse strings to quickly stimulate the economy. Others favour slashing the deficit to 3.8 percent of GDP this fiscal year, even faster than the 4.1 percent goal in the last budget.

EDITORIAL OF THE DAY

  • Right to reveal

    Delhi is India’s first state to announce a scheme for witness protection. But what about the witnesses in other states?

FC NEWSLETTER

Stay informed on our latest news!

INTERVIEWS

Sarthak Raychaudhuri

vice-president, HR, Asia South Whirlpool of India

GV Nageswara Rao

MD & CEO, IDBI Federal Life

Timothy Moe

Goldman Sachs

TODAY'S COLUMNS

Urs Schoettli

New masters of the Financial Times

A few days ago, Japan’s leading financial daily Nihon Keizai ...

Anuja Sharma

Focus mindfully to get the result

Have you ever tried to light a fire using the ...

Gautam Gupta

Our fashion schools need to notch it up

“Creativity is the key to success and primary education is ...

INTERVIEWS

William D. Green

Chairman & CEO, Accenture