5 law firms in fray to manage SAIL's FPO

Amarchand & Mangaldas and Fox Mandal are among the five leading law firms competing to manage the first phase of state-run Steel Authority of India's (SAIL) follow-on public offer (FPO), which is expected to raise Rs 8,000 crore.

Luthra & Luthra, S & R Associates and Crawford Bayley & Co are the other law firms that will pitch for securing the contract to a panel comprising officials from SAIL, the Steel Ministry and Department of Disinvestment on Friday, the company said.

The shortlisted firm will manage the first phase of SAIL's FPO, which is expected be launched early next calendar year, Disinvestment Secretary Sumit Bose said yesterday.

Earlier this week, however, SAIL Chairman C S Verma said the company plans to launch the share sale in the middle of December and if that deadline is missed, the public offer could be launched in January-February next year.

The shortlisted firm will manage the first phase of the 20 per cent share sale programme, under which the government plans to divest 5 per cent of its stake in the company, while the steel giant will issue additional shares equivalent to a 5 per cent stake.

Another 10 per cent stake will be sold under the second phase of the FPO, the timing of which will be decided later. The two-phase FPO may help raise a total of Rs 16,000 crore, Steel Minister Virbhadra Singh had earlier said.

At present, the government holds a stake of a little over 85 per cent in SAIL and post-FPO, its equity in the company is expected to go down to about 69 per cent.

SAIL wants to part-fund its Rs 70,000 crore expansion programme with the proceeds from the share sale, while for the government, the stake dilution will help attain the disinvestment target of Rs 40,000 crore for this fiscal.