New Delhi: Steel Authority of India, India's largest steel maker owned by Government, saw its shares being grabbed on Thursday, when 5% of its shares were open for sale as per the government's decision. In fact the Offer for Sale (OFS) was oversubscribed mid-way on the first day of its opening.
By 2 p.m. over 26.01 crore were subscribed, against 20.65 shares o n offer. representing 125 per cent of the overall and nearly 144 per cent of shares reserved for non-retail investors, according to stock exchange data.
Over 26.01 crore shares were sought by 1400 hrs on Thursday - the first day of the two-day offer for sale (OFS), stock exchange data showed.
The government has an option to sell 20.65 crores more in case of over-subscription. Thus the overall divestment of the prized government entity will total 10 per cent in effect.
Exchange data also showed the indicative price of bids at Rs 64.66 per share. There is a cap of 25 per cent of the shares on offer for any single bidder other than mutual funds registered with SEBI (Securities and Exchange Board of India.
At least 12.5 per cent of the offer shares will be reserved for the allocation to retail investors.
No single bidder other than mutual funds registered with SEBI will be allocated over 25 per cent of the shares, and mutual funds and insurance companies also enjoy a reservation of 25 % shares. on offer, according to the terms of OFS.
On the whole, the government is estimated to net Rs 2,600 crore through the sell-off. The overall target of government's disinvestment plan, including other public sector undertakings, is to raise Rs 2.1 lakh crore in the current financial year ending 31 March 2021.
Of this, so far Rs 28,298 crore has been raised including Rs 1,453.77 crore dividend from state-owned firms. Even though other undertakings are likely to fetch similar funds, the government will likely miss the target by a wide margin.
Due to Covid-19 related hiccups, privatisation of other lucrative firms such as Bharat Petroleum Corporation Ltd and the loss-making Air India have been deferred to the next fiscal.
The government is also facing cash crunch due to a significant fall in tax collection also.
(With input from PTI)