STEEL AUTHORITY OF INDIA TOLD TO SUBMIT SPECIFIC PROPOSAL ON FPO

The Indian government has asked the Steel Authority of India Limited (SAIL) to give a specific proposal for its proposed public offering and the public sector undertakings's board would discuss the same at a meeting later this month.

Once the specific proposal is submitted it would be taken up with the Finance Ministry as the government is likely to divest part of its holding at the time of public offer, a senior government official said.

The government currently holds 85.82 per cent stake in SAIL. About 4.59 per cent is with the Life insurance Corporation and the rest is with the public.

SAIL has sought the steel ministry's approval for a Follow-on-Offer(FPO) to part finance its Rs 70,000 crore (US$14.7 billion) expansion programme.

"We considered their (SAIL) proposal on FPO and have now asked the company to send us a specific proposal giving all details," the official said.

Asked if the government could divest some of its stake in the company, the official said, "The FPO could be a mix of both, issue of fresh equity from the company and offloading of additional government stake."

"All in all, by undertaking both the measures, government's stake in the company could get reduced by 10 per cent," another government official said.