Floor price for SAIL divestment fixed at Rs63 per share

The government has fixed the floor price for the offer for sale of a 5.82 per cent equity in Steel Authority of India (SAIL) at Rs63 per share.

The offer for sale of 24,03,96,572 shares of Rs10 face value will start on 09:15 on 22 March 2013 and close at 15:30 pm the same evening, SAIL said in a filing with the Bombay Stock Exchange (BSE).

The offer for sale, which will take place on a separate window of the stock exchanges, should raise a minimum of Rs1,514.45 crore at the base price.

The minimum bid quantity for the share offer is one share and the maximum is the total stock on offer, ie, 24,03,96,572 shares.

Allocation of shares to successful bidders will be on the basis of price parity.

Axis Capital Limited, Deutsche Equities India Pvt Limited, HSBC Securities and Capital Markets (India) Private limited, JP Morgan India Private Limited, Kotak Securities Limited, SBICAP Securities Limited are acting as merchant bankers for the SAIL share sale.

The floor price is at a 1.4-per cent discount to today's closing price of the SAIL stock of 63.90, which itself was 1.77 per cent lower to the previous closing price of the stock.

SAIL shares, which touched a 52-week low of Rs63.55 on the Bombay Stock Exchange, recovered marginally to close at Rs63.90 down 1.77 per cent from Wednesday's close.

SAIL had reported a 23 per cent decline in net profit, at Rs484 crore, for the third quarter of the current fiscal ended 31 December 2012, compared to the year-ago period, mainly due to lower net sales in a subdued market.

The share sale is part of the government's divestment drive to rein in a bulging fiscal deficit of 5.2 per cent.