Kicking off its disinvestment drive on a positive note, the government’s share sale offer in steel major SAIL got over-subscribed on Friday by nearly 1.5 times with almost an hour still left for bidding to close and ensured at least Rs 1,500 crore to the exchequer.
The offer for over 20 crore shares of SAIL also received a robust response from retail investors, to whom the government has offered a five percent price discount and has reserved 10 percent or over 2 crore shares for them.
The government is selling 5 percent stake in SAIL through this one-day offer, which received bids for more than 30 crore shares, worth over Rs 2,500 crore, by 2.45 pm itself.
The bidding was scheduled to continue till 3.30 pm at the BSE as well as the NSE.
Incidentally, the BSE website data showed the offer as getting over-subscribed 131 percent at around 2.25 pm, before revising it downward to 69 percent. Around 15 minutes later, the data on both BSE and NSE websites showed the offer getting finally over-subscribed.
The retail segment was over-subscribed 1.28 times, while non-retail segment was over-subscribed 1.5 times as on 2.45 pm, taking the total subscription level of over 20 crore shares at 1.48 times.
The SAIL offering is the first PSU share sale undertaken by the new government, which targets to raise Rs 43,425 crore through selling stakes in various state-owned firms during the current fiscal. It is also first disinvestment during the current fiscal.
It is probably the first OFS in which the stock exchanges are showing the retail and general category subscription with their respective indicative price separately.
The floor, or the minimum offer, price for SAIL’s share sale has been set at Rs 83 apiece, which is 2.75 percent less than yesterday’s closing price.
At the floor price of Rs 83, a 5 percent stake or over 20.65 crore shares in SAIL could garner around Rs 1,714 crore to the exchequer, which is expecting a minimum amount of Rs 1,500 crore after taking into account retail discount.
The government currently holds 80 percent stake in the company, which will fall to 75 percent after this offer.