SAIL plans public issue by March subject to market conditions

Saturday, 19 Feb 2011

Steel Authority of India said that it will attempt to launch the INR 8,000 crore follow on public offer before the fiscal end though submission of prospectus within February seems to be a difficult proposition.

Mr CS Verma chairman of SAIL told PTI that “We will definitely attempt to launch the FPO before the end of the current fiscal. Filing the red herring prospectus, however, within February seems to be a tall target.”

However, he said the attempt to launch the offer would entirely depend upon the market conditions and liquidity situation in the system. Mr Verma added that “We will attempt it depending upon the market condition. We have to see which are other issues that are hitting the market. We have to make assessment of the market conditions.”

Drawn his attention to the forthcoming FPO of State run Oil and Natural Gas Corporation, he said that “We will also have to see when ONGC is entering the market and when the refunds of the ONGC issue will go back to the investors. There has to be enough liquidity.”

ONGC is likely to enter the market with its proposed INR 13,000 crore FPO on March 15.

The SAIL FPO was earlier slated to hit the market in February, but got delayed due to some issue with the book running lead managers which has now been solved. However, fearing a repeat of sorts, the steel major is now keen on taking legally binding undertakings from the four investments bankers SBI Caps, Kotak Mahindra, Deutsche Bank and HSBC. It has though agreed to keep the banks for managing its issue.

Mr Verma said that “There were some conflict with BRLMs. Now, we have taken the legal opinion of the Attorney General of India. We are to take the legally binding undertaking from them. And, then we will decide on the future course of action and about the timing of the FPO.”

The government has so far garnered about INR 23,000 crore by divesting its stakes in Coal India, Engineers India, MOIL and some other PSUs against its target of INR 40,000 crore. It is banking on big ticket FPOs of ONGC and SAIL to meet the target.

(Sourced from PTI)