The Empowered Group of Ministers (EGoM) have kept the floor price of the Offer for Sale from Steel Authority of India's (SAIL's) at Rs 63 per share.
The floor price is marginally lower than the closing share price of Rs 63.90 on the National Stock Exchange (NSE).
Shares in Steel Authority of India (SAIL) plunged to a one-year low on Thursday in line with broad market sentiment.
On Wednesday, a group ministers had approved the sale of a 10.82 percent stake in Steel Authority. However, due to adverse market conditions not being too favourable, the government will divest only over 5 percent stake in the OFS issue today and the remaining 5 per cent will be auctioned sometime later in FY14. It is expected that the SAIL offering would fetch the government around Rs 1500 crores, against the envisaged Rs 3000 crores.
The SAIL offering comes close on the back of sale in other companies like Mineral and Metal Trading Corporation Ltd , National Mineral Development Corporation Ltd and Rashtriya Chemicals and Fertilizers Ltd.
The government has been selling its stake in companies it owns largely to curb the fiscal deficit target, which is likely to be around 5.2-5.3 per cent of the gross domestic product (GDP) for the current year.
Next fiscal is also likely to see a host of offerings from the government, as subsidies are weighing on the government's finances.
SAIL is India's largest steel producing company. With a turnover of Rs. 50,348 crore, the company is
among the five Maharatnas of the country's Central Public Sector Enterprises. SAIL has five integrated steel plants, three special plants, and one subsidiary in different parts of thecountry.
The present offering of Steel Authority like most other offerings from the government is likely to sail through without too many problems.