State-run Steel Authority of India's (SAIL) much-awaited follow-on public offer (FPO), tentatively scheduled for June this year, was deferred on account of stock market volatility, the Parliament was informed today.
"The transaction for the first tranche, which was tentatively scheduled to open for public subscription in June 2011, has been deferred due to volatility in the share market, coupled with low market price of SAIL scrip," Minister of State for Finance SS Palanimanickam said in a written reply to the Rajya Sabha.
The minister added that the timeline for opening the issue would be decided in due course based on improvement in market conditions.
The government had approved disinvestment of 10% paid-up equity capital in SAIL in April last year, along with the issue of fresh equity of 10% of paid-up equity capital by the company, in two discrete tranches of 5% disinvestment and 5% issue of fresh equity each.
The government holds 85.82% stake in the steel maker. This would come down to 76.97% after the first tranche and further to 68.93% after the second tranche.
"Retail individual investors and eligible employees under the employees' reservation portion would be entitled to five% price concession," Palanimanickam said.
