As many as 17 merchant bankers, including JPMorgan Chase, Kotak and Goldman Sachs, are likely to make a pitch to a government-constituted panel for managing the first phase of steel major SAIL's upcoming Rs 8,000 crore FPO.
"There are 17 bankers which will make presentations before a panel on August 31 and September 1 for managing SAIL's FPO. JPMorgan Chase, Kotak, Goldman Sachs, SBI Cap are expected to take part in it. Technical bids for the same will be opened tomorrow," a senior government official told PTI.
The panel comprises of senior officials of the Finance Ministry, Steel Ministry and SAIL.
Steel Authority of India (SAIL) had earlier this month said it will appoint up to six merchant bankers to advise it on the timing of the first tranche of its share sale.
"The names of the six bankers will be announced after that. The SAIL FPO is expected in January-February next year," the official said.
The company has invited merchant bankers to manage the first phase of its 20 per cent share sale programme, under which the government plans to divest 5 per cent of its stake in the company, while the steel giant will issue additional shares equivalent to a 5 per cent stake, SAIL said.
Another 10 per cent stake will be sold under the second phase of the FPO, the timing of which will be decided later.
"Market conditions are expected to improve further, so it was decided to go with the proposed two-phase disinvestment. Also, SAIL does not require the entire sum right away," the official said.
The two-phase FPO may help raise a total of Rs 16,000 crore, Steel Minister Virbhadra Singh had earlier said.
As per the proposal, the government will divest 10 per
At present, the government holds a stake of a little over 85 per cent in SAIL and post-FPO, its equity in the company is expected to go down to about 69 per cent.
SAIL wants to part-fund its Rs 70,000 crore expansion programme with the proceeds from the share sale, while for the government, the stake dilution will help attain its disinvestment target of Rs 40,000 crore for this fiscal.
Even though SAIL has invited merchant bankers for the FPO, it is still waiting for certain clearances from the government. These include clearances from the Appointments Committee of the Cabinet and the PMO to trim its board size and appoint independent directors.
