State-owned Steel Authority of India Limited may launch its 20 per cent share sale plan, which could generate up to Rs 16,000 crore (Rs 160 billion), by the third quarter of the current fiscal, a top government official said on Tuesday.
"I am hopeful of getting clearance from the Appointments Committee of the Cabinet by this month on restructuring of SAIL's board.
"If the approval comes this month, we will trigger the remaining process by the next month, so that FPO can come by October- November. That is what I am hoping," Steel secretary Atul Chaturvedi told PTI.
In April, the government had cleared the proposal to sell 20 per cent equity in the country's largest steel maker.
The share sale would see government offloading 10 per cent of its stake in the steel maker, while the company will raise fresh equity in the same proportion.
"We are all ready with all the documents like request for proposals (for FPO).
As soon as we get the approval. We will trigger the process," the secretary said.
The government at present holds a little over 85 per cent stake in SAIL and post FPO its equity in the company is expected to go down to about 69 per cent.
Steel Minister Virbhadra Singh had recently said the FPO could generate Rs 16,000 crore.
Shares of SAIL were trading at Rs 198.20, up 0.89 per cent from the previous day. SAIL is in the process of restructuring its board mainly for expediting decision making keeping in mind its estimated Rs 70,000 crore (Rs 700 billion) expansion programme.
The company has 12 official director on board and two independent directors. The company would have to hire at least 10 more independent directors to be SEBI compliant.
However, the company has proposed to trim the total board strength to 18, that could see nine official and equal number of independent directors.
The ACC, which is studying the proposal on restructuring SAIL board, had recently asked the steel ministry to look into the model of Coal India while revamping.
Asked if SAIL could follow Coal India's board model, the Secretary said the two companies are different.
CIL has nine subsidiaries while SAIL has its own plants and they are not subsidiaries. "We have clarified to ACC. The structure (of SAIL) is not comparable (with CIL)," Chaturvedi said.
