Govt raises $280M from Steel Authority of India share sale

The Centre has managed to see through its offer for sale of 5.8 per cent stake in state-run domestic metal giant Steel Authority of India Ltd by raising around Rs 1,522 crore ($280 million) on Friday.

The move would boost its final year-end disinvestment tally, which is important for meeting fiscal deficit targets. High fiscal deficit had raised concerns of sovereign credit rating downgrade.

Although the overall amount raised through such share sale in public sector units has been substantial this fiscal, it may not yet meet its original target of around $5.5 billion.

The share sale, which was open for six hours on Friday, had a floor price of Rs 63 a share. It was fully subscribed with an indicative price of Rs 63.07 a share. SAIL scrip closed at Rs 63.4 a share, down 0.78 per cent on the BSE in a weak Mumbai market on Friday.

The government held 85.8 per cent stake in SAIL as of December 31, 2012. This now shrinks to 80 per cent post the share sale.

SAIL is the now the second largest steel producer in India by capacity. Last year, it was surpassed by JSW Steel, thanks to its acquisition of Ispat and further capacity expansion, as the top domestic steel maker. Tata Steel, however, remains the largest steel company by revenues, though much of its operations are outside the country after it acquired Corus in the UK.

SAIL scrip has lost around a third of its value since the beginning of the year.

(Edited by Prem Udayabhanu)

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