SAIL not to issue fresh equity, govt to sell 5% stake

Wed, October 19, 2011 | AgencyPress Trust of India

New Delhi : Amid volatility in stock markets, blue-chip state-owned company SAIL has decided against issuing fresh equity, though the government will go ahead with its proposal to offload 5% stake in the firm.

"The SAIL board has decided that there will be no fresh equity issue. Only government stake sale will happen," Disinvestment Secretary Mohammed Halesem Khan told reporters here.

The Government holds a 85.82% stake in the maharatna company. The 5% stake sale in Steel Authority of India (SAIL) is likely to fetch the government over Rs 2,000 crore at current market prices. Shares of SAIL are trading currently at Rs 105 on the BSE.

Khan said the change in SAIL's Follow-on Public Offer (FPO) plan would require fresh approval from the Cabinet.

SAIL's FPO has failed to meet deadlines repeatedly since December 2010, due to several reasons, like rising coking coal prices and problems with merchant bankers, besides adverse market conditions.

As regards the disinvestment of oil major ONGC, Khan said the government would try to complete it by December end.

"We will initiate discussion on the FPO process of ONGC in 4-5 days," another official in the ministry said.

The government plans to offload a 5% stake in the company, which would fetch it around Rs 12,000 crore, nearly one-third of the Budget disinvestment target of Rs 40,000 crore.

Although the government has plans to raise Rs 40,000 crore from disinvestment in the current fiscal, it has not been able to make much headway because of uncertain market conditions. So far, it has raised only Rs 1,144 crore from stake sale in Power Finance Corporation (PFC).

Coal India overtakes Reliance Industries as most valuable company

Wed, 17 Aug, 2011

MUMBAI: State-run Coal India today toppled billionaire Mukesh Ambani-led Reliance Industries as the country's most valued company, with a slightly higher market valuation around mid-day.

At around 1200 hours on the National Stock Exchange, Coal India Ltd (CIL) commanded a market cap of Rs 250,759.67 crore, with an over 2 per cent rise in its share price. At that time, RIL had a market cap of Rs 250,580.21 crore on the NSE.

A few minutes later, CIL's market valuation exceeded that of RIL on the BSE as well. At around 1206 hrs, RIL's market cap on the BSE stood at Rs 2,50,468 crore, slightly lower than CIL's Rs 2,50,538 crore.

At 1206 hours today, RIL shares were trading 0.82 per cent higher at Rs 765.20, while CIL was up 2.32 per cent at Rs 396.60.

CIL has been closing the gap on RIL in terms of market valuation over the past few days and on August 9, the gap slipped below 1 per cent.

RIL extended its lead by some margin since then, but the PSU coal giant managed to surpass the private sector energy giant's market capitalisation in today's trade at around 1200 hours.

At yesterday's close, RIL had a market cap of Rs 248,504.44 crore, as against CIL's 244,822.28 crore, on the BSE.

At the time of today's market opening also, RIL had a higher market cap of Rs 249,454 crore than CIL's Rs 244,822 crore.

Way back in 2006, RIL had toppled ONGC to emerge as the country's most valued firm and has managed to stay on the top since then.

ONGC had also come very close to toppling RIL as the country's most valued firm last week, but lost ground in the past few trading sessions. The stock was trading 2.4 per cent higher at Rs 279.50, with a market cap of Rs 2,39,125 crore, in today's trade at 1220 hours.

Marketmen would be keenly watching the three stocks to see whether RIL is able to regain its lead or loses further ground in the market-cap charts.

RIL's stock has been under acute pressure in recent past, while ONGC and CIL have managed to outperform in a weak market on several occasions in the past few days. (sourced ET)

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)