SAIL divestment on Mar 20, Nalco share sale next week

The government's 12.15% stake sale in Nalco is likely next week and 10.82% divestment in SAIL may take place on March 20, sources said.

With the two issues, the government will be selling part of its stake in four public sector firms in a span of two weeks, as the public offer to sell 12.5% stake in Rashtriya Chemical and Fertilisers (RCF) is scheduled to be launched tomorrow.     Besides, stake sale in trading giant MMTC is expected to happen on March 14.

All the four issues, which are proposed to hit the market through offer for sale (OFS) route, are expected to fetch about Rs 5,000-5,500 crore to the government's kitty, if subscribed fully. The SAIL issue alone is expected to garner over Rs 3,000 crore.

"Date of stake sale in SAIL has been planned for March 20 and the empowered group of ministers (EGoM), headed by Finance Minister P Chidambaram, will meet a day before to decide the floor price of the issue," a source in the government said.   

Another person, who is familiar with the Nalco stake sale plan, said "the EGoM is likely to meet on March 12 to decide the floor price for the proposed divestment in the company. The issue will hit the markets next week itself."

Declining to comment on the date for the Nalco issue, he said that road shows, to attract the investors, have already been completed and were held at the US, Britain, Hong Kong, Singapore, Chennai and Mumbai.     For the SAIL stake sale, the pre-bid road shows had started yesterday and will continue till March 13. SBI Caps, Kotak Mahindra and Deutsche Bank are the merchant bankers for the SAIL issue, while IDFC Capital, Axis Capital and SBI Caps are the lead bankers for the Nalco issue.

Post stake sale, the government's stake would come down to 75% in both the firms, SAIL and Nalco, if subscribed fully. This would also lead to meeting SEBI norms on minimum public shareholding.

The Cabinet Committee on Economic Affairs (CCEA) had in July last year approved 10.82% disinvestment in SAIL out of government's 85.82% stake.

The Nalco share sale, approved by the CCEA in September, 2012, could not happen last year due to poor market conditions and company's second quarter results not reflecting its true financial position.

Meanwhile, shares of SAIL and Nalco, both, closed down today on the BSE despite S&P BSE Sensex closing up 160.93 points at 19,413.54. SAIL shares fell 1.99% to close at Rs 69.10 apiece, while Nalco scrip was down 1.14% to close at Rs 43.30.

So far, the government has raised over Rs 21,500 crore through stake sale in public sector companies against the revised estimates of Rs 24,000 crore for the current fiscal. For the next fiscal the government has kept the disinvestment target at Rs 55,814 crore.