NEW DELHI: The offer for sale (OFS) of the government's five per cent shareholding in steel major Steel Authority of India (SAIL) got great response on the first day of its opening on Thursday. Shares were was oversubscribed 3.6 times and enthused by the response, the government has decided to exercise the greenshoe option of another 20.65 crore shares or five per cent of the total equity.
"Issue subscribed 4.14 times of base size at a clearing price above the floor price by non-retail investors. The govt has decided to exercise the green shoe option. Retail investors get chance to bid tomorrow," DIPAM Secretary Tuhin Kanta Pandey said in a tweet.
Over 74.74 crore shares were sought by non-retail investors at the close of trading hours, stock exchange data showed. The shares sought were 362 per cent of the overall issue size and nearly 413 per cent of the shares reserved for non-retail investors who were supposed to make bids on the opening day of the offer for sale (OFS). Of the bids, 37.46 crore put in 100 per cent margin money.
The total OFS size was 20.6 crore shares of face value of Rs 10 each (base offer size), with an option to
additionally sell up to 20.6 crore equity shares. With this, the total OFS goes up to 41.3 crore shares and government is likely to mobilise Rs 2,664 crore at a floor price of Rs 64 per share.
SAIL is India’s largest steel producer with an annual capacity of about 21 million tonne per annum (MTPA). The government holds 75 per cent stake in SAIL. Of the 20.65 crore shares on offer, 18.07 crore have been reserved for non-retail investors and 2.58 crore for retail investors. The indicative price of bids that came in on Thursday was Rs 65.49, according to BSE data.
SAIL closed nearly 10 per cent down on the BSE at Rs 67.25. At least 12.5 per cent of the shares will be reserved for allocation to retail investors. So far, the government has raised Rs 28,298.26 crore from disinvestment proceeds. This includes Rs 14,453.77 crore received as dividend from the public sector companies.