THE Narendra Modi-led NDA government at Centre may sell a five-percent stake in PSU major Steel Authority of India Ltd (SAIL) in the last week of this month, beginning the process of what seems to be a busy divestment schedule, says a media report.
In fact disinvestment as a tool for economic revival was part of the poll promises made by the BJP and Narendra Modi, who...won a landslide election victory in May, is expected to speed up divestments to bolster revenue generation.
Roadshows for the stake sale, valued at about $340 million at current market prices, will begin soon after the presentation of the federal budget on July 10, the people said.
The SAIL stake divestment, if completed, would be the first of a series of asset disposals that economists estimate could raise 600-800 billion rupees ($10-$13 billion) in this fiscal year that ends in March 2015.
The divestment proceeds will make it possible for Government to fund a potential increase in the budget deficit, which has already hit $40 billion or nearly half of the target for this fiscal year, without having to increase borrowing.
The government's asset sale drive is also expected to gather momentum after the market regulator last month said the state should dilute its stake in listed public-sector companies over the next three years and cap it at 75 percent. The government owns stakes of as much as 90 percent in some listed PSUs including Coal India, the world's largest coal miner, and trading company MMTC Ltd.
After selling a 5 percent stake in SAIL, the government's holding in the country's second-biggest steelmaker would come down to 75 percent.SAIL is India's largest steel producing company. With a turnover of Rs. 49,350 crore, the company is among the seven Maharatnas of the country's Central Public Sector Enterprises. SAIL has five integrated steel plants, three special plants, and one subsidiary in different parts of the country.