 "Govt to sell 5.8% stake in SAIL via auction tomorrow")
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Citing poor market conditions, the ministry argued that current price of SAIL scrip does not reflect its true value.[/caption]
The government will sell 240.4 million shares, or a 5.82 percent stake, in state-owned Steel Authority of India Ltd through an auction on March 22, the steel ministry said on Wednesday.
The SAIL issue would fetch the exchequer about Rs 1,587 crore at Rs 66 apiece, if subscribed fully.
Earlier on Wednesday, a panel of ministers had approved the sale of a 10.82 percent stake in the steelmaker. However, it trimmed the offer size to 5.82 percent against the original plan of 10.82 percent stake sale due to opposition from the Steel Ministry, the parent ministry of the SAIL.
The base price for the offer will be made public today.
The stake sale is expected to rake in about Rs 1,564 crore at Wednesday’s closing price.
The ministry did not elaborate on why the size of the sale had been scaled back. Shares in the company closed 0.4 percent lower at Rs 65.15 in Mumbai trading. So far this year, the stock has lost 28 percent of its market value.
At the current market price, the stake sale is worth about $290 million.
Agencies