SAIL FPO deferred due to market volatility: Govt
State-run Steel Authority of India's (SAIL) much awaited follow-on public offer, tentatively scheduled for June this year, was deferred on account of stock market volatility, the Parliament was informed Tuesday.
"The transaction for the first tranche, which was tentatively scheduled to open for public subscription in June 2011, has been deferred due to volatility in the share market, coupled with low market price of SAIL scrip," Minister of State for Finance S S Palanimanickam said in a written reply to the Rajya Sabha.
The Minister added that the timeline for opening the issue would be decided in due course based on improvement in market conditions.
The government had approved disinvestment of 10 percent paid up equity capital in SAIL in April last year, along with the issue of fresh equity of 10 percent of paid up equity capital by the company, in two discrete tranches of 5 percent disinvestment and 5 percent issue of fresh equity each.
Government holds 85.82 percent stake in the steel maker. This would come down to 76.97 percent after the first tranche and further to 68.93 percent after the second tranche.
"Retail individual investors and eligible employees under the employees' reservation portion would be entitled to five percent price concession," Palanimanickam said.