Govt loooking to divest 10% stake in SAIL

Govt loooking to divest 10% stake in SAIL through a follow on public offer; has expansion plans of Rs 70,000 crore by 2012 to take the capacity to 23 mn tons

PK Rastogi, Steel Secretary said that government is going to divest 10% stake in SAIL through a follow on public offer (FPO). At current market price, government will be able to get over Rs 6800 crore from the divestment in SAIL. Government currently owns 85.8% stake in SAIL. Currently, shares in the hands of general public is only 14.7%. SAIL has expansion plans of Rs 70,000 crore by 2012 to take the capacity to 23 mn tons. Company has cash of Rs 14000 crore.

Domestic steel prices in past 1 month are as follows: Long products prices fell 10-15%, Flat products prices were up 8-10%. Internationally, steel prices have remained flat in past 1 month. Steel prices in 3 months are up 10%. Global steel prices and domestic steel prices have converged. There is no case for anti dumping duty now. Higher iron ore royalty could have an implication on steel. Government proposes increasing Royalty On Mineral Mining.

Agencies said that the governmen will levy 10% Value-added Royalty On Iron Ore. The existing duty is Rs 11 – 27/ton depending on the grade. Royalty could be between Rs 140 to about Rs 300/ for high grade lumps.

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