EGoM meet on SAIL disinvestment postponed for tomorrow
New Delhi: A crucial meeting of an inter- ministerial panel that was scheduled for Tuesday on disinvestment of government's 10.82 percent stake in steel major SAIL has been deferred for tomorrow amid political developments.
The meeting of Empowered Group of Ministers (EGoM) on Disinvestment, headed by Finance Minister P Chidambaram, has been postponed for tomorrow as some ministers, who are part of the EGoM, were not available, sources said.
They added that the government also wanted to gauge the market sentiments on RBI's decision to cut the repo rate by 25 basis point to 7.50 percent before finalising the floor price of SAIL's issue, which is slated to hit on March 21 (day after tomorrow).
SAIL scrip touched a year-low at Rs 64.60 on the BSE during the day and finally settled at Rs 65.25, down 3.55 percent.
At the current market price, a 10.82 percent stake sale would fetch government around Rs 2,500 crore.
Earlier in the day, UPA's key ally DMK announced withdrawal of its support from the government.
SAIL comes under the administrative control of Steel Ministry headed by Beni Prasad Verma, who is also one of the members of the EGoM. Verma has been ticked off by Congress after his comments against Samajwadi Party chief Mulayam Singh Yadav created a controversy.
He had not attended the Congress Parliamentary Party (CPP) meeting this morning though he attended the cabinet meeting in the evening.
The government has already held roadshows in Singapore, Hong Kong, the US, the UK and continental Europe for the proposed SAIL disinvestment.
The merchant bankers for SAIL share sale include SBI Caps, Kotak Mahindra and Deutsche Bank. After stake sale, the government's stake would come down to 75 percent.
For the third quarter ended December 31, 2012, SAIL reported a 23 percent decline in its net profit at Rs 484 crore mainly due to lower net sales realisation amid subdued market conditions.
The Cabinet Committee on Economic Affairs had in July last year approved 10.82 percent disinvestment in SAIL out of government's 85.82 percent stake, through the Offer of Sale (OFS) route.
However, it could not be taken forward amidst the subdued market conditions. The government has kept the issue on hold anticipating buoyancy in the market to return.
SAIL shares have not been part of the market rally during 2012. The stock which touched a high of Rs 115.90 on February 17, 2012, has been losing ground ever since talks of disinvestment.
The government is banking on stake sale of SAIL to meet the disinvestment target of Rs 24,000 crore in the current fiscal. So far it has raised over Rs 22,300 crore through PSU stake sales.