Net in second quarter declines 35 per cent, despite sales rise.
State-run Steel Authority of India (SAIL) today said it was likely to hit the capital market by January-February 2011 after filing the draft prospectus for the follow-on public offer (FPO) by December.
It reported a 34.47 per cent decline in its consolidated net profit to Rs 1,090.01 crore for the second quarter, from Rs 1,663.49 crore in the same period last year.
However, net sales of the company increased to Rs 10,602.88 crore in the quarter under review from Rs 9,943.92 crore in the corresponding quarter of the previous year. During the period, the company sold 8.5 lakh tonnes of special and value-added steel products, recording a growth of 10.1 per cent over the corresponding period last year. SAIL attributed the growth in the second quarter sales to higher intake by the construction and manufacturing sectors.
At present, the government holds 86 per cent stake in SAIL and the sell-off is estimated to mop up Rs 16,000 crore through the FPO, which is expected to be completed in two phases of Rs 8,000 crore each.
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For FY 2011, the government has set a target of raising Rs 40,000 crore from selling its stake in some of the major profit-making public sector undertakings (PSUs). The government has plans to fund its social sector developmental plans with the disinvestment proceeds, besides tiding over its fiscal deficit concerns.
SAIL, on the other hand, wants to spend the money to fund its ambitious Rs 70,000 crore capacity expansion plans.
The company ruled out any plans to join hands with ArcelorMittal. “We have never proposed a joint venture (JV) with ArcelorMittal. We have not discussed with them any plans to set up a JV plant.” However, ArcelorMittal had earlier said it has proposed SAIL for a joint venture partnership to set up a plant in Jharkhand.