Steel minister says no hurry on SAIL disinvestment

Steel Minister Beni Prasad Verma on Friday said he was not in a hurry to hit the markets with government-owned Steel Authority of India’s (SAIL’s) follow-on public offer (FPO), estimated to be around Rs 8,000 crore.

"The SAIL FPO has been postponed as the market was down. We cannot forecast when this will improve and when the offer will hit the market. We are not in a hurry. The urgency, if any, is of the finance ministry and not ours,” he said.

SAIL’s FPO was supposed to hit the markets in February, for which the steel giant had appointed six merchant bankers in September. In January, the FPO got delayed after the government issued notices to four of the short-listed banks for taking up the task of managing its rival, Tata Steel’s share sale.

Earlier this month, SAIL chairman C S Verma had said the company would file the red herring prospectus in May for the FPO, which was likely to come in the market in the first quarter of 2011-2012.

SAIL is expected to utilise the proceeds from issue of fresh equity towards funding its capital expenditure. It has an ambitious plan to raise its installed hot metal production capacity from the existing 13.82 million tonnes per annum (mtpa) to 23.46 mtpa.

The minister also said as the export duty on iron ore had been raised, the price would come down at home and so would the price of steel. The government raised the export duty on ore fines four-fold to 20 per cent in the 2011-12 Budget.

SAIL is expected to utilise the proceeds from issue of fresh equity towards funding its capital expenditure. It has an ambitious plan to raise its installed hot metal production capacity from the existing 13.82 million tonnes per annum (mtpa) to 23.46 mtpa.

The minister also said as the export duty on iron ore had been raised, the price would come down at home and so would the price of steel. The government raised the export duty on ore fines four-fold to 20 per cent in the 2011-12 Budget.