SAIL FPO likely before Dec holidays

NEW DELHI: Steel Authority of India (SAIL) could come out with its follow-on public offer ( FPO) as early as December, as the company is keen to avoid the holiday season in the developed countries, a company official said.

“If the issue is unable to open in December, it would probably come up by late January or early February next year,” chairman CS Verma said after the company’s AGM. Steel secretary PK Misra had also said that the SAIL’s FPO may be advanced to December to get maximum benefit from the buoyant market conditions.

The offer will involve a 5% stake sale by the government and 5% fresh equity offer by the company, though the government has approved 10% fresh equity and 10% disinvestment in the company. The second round of offer will be launched the next financial year.

The steel major is still to complete appointment of requisite number of independent directors as per SEBI guidelines. Besides, the government is restructuring its board to reduce the number of functional directors.

The company has already shortlisted six bankers, including JP Morgan and Deutsche Bank, for managing the first phase the FPO. SBI Capital, Enam Securities, Kotak Mahindra Capital and HSBC are the other bankers for the FPO.

The government holds a little over 85% stake in SAIL and post-FPO, its equity in the company is expected to go down to 69%. SAIL wants to part-fund its Rs 70,000-crore expansion from the proceeds of the share sale, while for the government, the stake dilution will help attain its disinvestment target of Rs 40,000 crore for this fiscal.