"The SAIL board has decided that there will be no fresh equity issue.
"Only government stake sale will happen," disinvestment secretary Mohammed Haleem Khan told reporters in New Delhi.
The government holds a 85.82 per cent stake in the maharatna company.
The 5 per cent stake sale in Steel Authority of India is likely to fetch the government over Rs 2,000 crore (Rs 20 billion) at current market prices.
Shares of SAIL are trading currently at Rs 105 on the BSE.
Khan said the change in SAIL's follow-on public offer plan would require fresh approval from the Cabinet.
SAIL's FPO has failed to meet deadlines repeatedly since December 2010, due to several reasons, like rising coking coal prices and problems with merchant bankers, besides adverse market conditions.
As regards the disinvestment of oil major ONGC, Khan said the government would try to complete it by December end.
"We will initiate discussion on the FPO process of ONGC in 4-5 days," another official in the ministry said.
The government plans to offload a 5 per cent stake in the company, which would fetch it around Rs 12,000 crore (Rs 120 billion), nearly one-third of the Budget disinvestment target of Rs 40,000 crore (Rs 400 billion).
Although the government has plans to raise Rs 40,000
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