The union cabinet today approved a proposal to divest a 20 per cent stake in state-run Steel Authority of India Ltd (SAIL) through a follow-on public offer, to raise as much as Rs16,000 crore, home minister P Chidambaram said today.
The two-phased FPO would be a blend of government stake sale and an issue of fresh equity by the company, Chidambaram told reporters after the Cabinet Committee on Economic Affairs (CCEA) approved the proposal.
CCEA today approved the proposal for raising additional equity by SAIL to the extent of 10 per cent of the paid-up equity and disinvestment of a portion of Government of India's holding in SAIL by an extent of 10 per cent through offer for sale, to be carried out in two separate tranches, an official release said.
Post divestment, the government would hold 69 per cent in the expanded equity of SAIL against 85.82 per cent at present.
The FPO would comprise the first tranche of the fresh issue of 5 per cent pre-issue paid-up equity of the company and offer for sale of 5 per cent of government equity in SAIL.
The CCEA has accorded permission for effecting the second tranche, similar to the first, at an appropriate time depending on the market conditions.