SAIL FPO likely to hit capital market by Jan-Feb: CS Verma

State-run SAIL's follow-on public offer is likely to hit the capital market by January-February and the draft prospectus for the issue will be filed by December, Chairman C S Verma said today.

"In the next two weeks, we will kick-off the meeting with investment bankers on the FPO. In early December, we will be in a position to prepare a Draft Red Herring Prospectus and then later on, will file the DRHP," Verma told reporters here.

"The FPO is expected by January-February," he said.

The state-run steel major hopes to raise Rs 8,000 crore from the first phase of the 20 per cent share sale programme. In the first phase, 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 capacity expansion programme with the proceeds from the share sale, while for the government, the stake dilution will help attain its disinvestment target of Rs 40,000 crore for this fiscal.