SAIL slips marginally as stake sale commences

Stock slips 0.5% at Rs 63.60, recovers from lows

Sail slipped in opening trades this morning as the stake sale in the PSU major commenced on the bourses.

The floor price for SAIL's share sale has been set at Rs 63 apiece, which was a 1.41 per cent discount to yesterday's closing price.

The Empowered Group of Ministers (EGoM) on disinvestment, headed by Finance Minister P Chidambaram, yesterday decided on pricing of 24.03 crore share or 5.82 per cent stake sale of the country's largest steel producer through the Offer For Sale (OFS) route.

According to sources, the government plans to divest only 5.82 per cent stake in SAIL, just enough to meet this year's disinvestment target.

The auction, if subscribed fully, would take the proceeds from disinvestment in this fiscal to at least Rs 23,800 crore, the highest ever realisation on disinvestment front in a single year. It would be, however, a tad less than the revised estimates of Rs 24,000 crore.

Earlier, the Centre was looking at selling 10 per cent of its holdings in the company, but later it decided to offload the remaining stake in the next financial year at better valuations after the company completes its expansion plans, said a person familiar with the development. In April 2010, SAIL commanded a valuation of a whopping Rs 1.58 lakh crore. Today, its market capitalisation stands at a mere Rs 26,869 crore.

Sail is down 0.5% at Rs 63.60. The stock opened at Rs 63.70 and touched a low of Rs 63.10 - down 1.3% from its previous close. Around 1,60,000 shares have been traded on the BSE so far this morning.