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SAIL dips 10% after government sets floor price at Rs 64 for OFS

The government has decided to sell up to 206.5 million shares, or 5 per cent of total equity, of SAIL through OFS

SAIL | Buzzing stocks | Markets

SI Reporter  |  Mumbai 


Shares of Steel Authority of India (SAIL) dipped 10 per cent to Rs 67.60 on the BSE on Thursday after the government fixed floor price at Rs 64 per share for its 10 per cent stake sale in steel company via offer for sale (OFS). The OFS for non-retail investors opens today, while for retail investors, it will start on Friday.

The floor price for the OFS is at a 14.32 per cent discount to Wednesday's closing price of Rs 74.70.

The government has decided to sell up to 206.5 million shares, or 5 per cent of total equity of SAIL, through the OFS, the company said on Wednesday. It has also kept the option to sell another 5 per cent if the issue is oversubscribed. The government’s stake post the sale will come down from 75 per cent to 65 per cent if the greenshoe option is exercised.

The 10 per cent stake sale in the steel maker could fetch the government Rs 2,600 crore in divestment receipts.

The stock hit an over two-year high of Rs 80.35, on January 5, 2021, amid expectations of further improvement in performance due to the realisation of uptick in the domestic market and progressively lower proportion of exports.

Since November 5, post the July-September quarter (Q2FY21) results, the stock's price has more-than-doubled after the company reported a consolidated net profit of Rs 437 crore on the back of strong operational performance. It had posted a net loss of Rs 286 crore in the same quarter of previous fiscal and a loss of Rs 1,226 crore in the June quarter (Q1FY21).

At 10:08 am, was trading 8 per cent lower at Rs 68.55 on the BSE, as compared to 0.32 per cent decline in the S&P BSE Sensex. A combined around 77 million equity shares had changed hands on the counter on the NSE and BSE.

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First Published: Thu, January 14 2021. 10:10 IST