The release of the FPO is chiefly dependent of the price of the coking coal as it is the most essential material for steel industry to run. The current prices of coking coal are at $330 a tonne, which is expected to come down to approximately $220-230 per tonne.
Earlier, the SAIL FPO was supposed to hit the capital market on June 14, however, simultaneous hike in the coal prices and the input prices hindered the listing. SAIL has been regular in failing to meet the deadline of its FPO due to the unfavourable market conditions and problem with merchant makers. Despite this fact, the company declined the opportunity of selling its share that could have risen up to Rs 8,000 crore.
Currently, government with little over 85% in SAIL has planned to divest 5% of its holding in the first phase of the disinvestment, in order to achieve the target to raise Rs 40,000 crore in the current fiscal. However, the company plans to come with fresh equity issue of 5% in the second phase.