SAIL

SAIL Disinvestments – Burning Issues – Free PDF Download

 

  • The government is planning to sell 5% stake in Steel Authority of India Ltd (SAIL) through an offer for sale, which could  fetch about ₹1,000 crore .
  • SAIL is a Maharatna company – it enjoys significant operational and financial autonomy

The Maharatnas

  1. Bharat Heavy Electricals Limited (BHEL)
  2. Coal India Limited
  3. Gas authority of India limited (GAIL)
  4. Indian Oil Corporation Limited (IOCL)
  5. National Thermal Power Corporation Limited (NTPC Limited)
  6. Oil & Natural Gas Corporation Limited (ONGC)
  7. Steel Authority of India Limited (SAIL)
  8. Bharat Petroleum Corporation Limited
  9. Hindustan Petroleum Corporation Limited
  10. Power Grid Corporation of India Limited
  • Steel Authority of India Limited (SAIL) is  a public sector undertaking, owned and  operated by the Government of India.
  • It is a steel making company
  • Annual turnover – Rs. 66,267 Crore (US$9.32 Billion) for fiscal year 2018-19
  • ~70 thousand employees
  • Assets = 11 billion USD

SAIL operates and owns 5 integrated steel plants at

  1. Bhilai,CH
  2. OD
  3. Durgapur,WB
  4. JH
  5. Burnpur(Asansol),WB
  • 3 special steel plants Salem, Durgapur and Bhadravathi.

 

Who are SAIL’s customers?

  • Besides supplying its full range of products to institutional  buyers like Defence and the  Railways,
  • SAIL is successfully servicing the requirements of a  variety of customers in the  following user segments:
  1. Projects
  2. Construction
  3. Heavy engineering
  4. Cycle
  5. Auto segment
  6. Container
  7. Transportation (oil/gas/water)
  8. Coated sheet manufacturers
  9. Agricultural equipment

Shareholders

  • The government holds a 75 % stake in SAIL and retains voting control of the company.
  • Other major shareholders are
  1. Insurance companies with 10.84%,
  2. Financial institutions/Banks with 3.50%
  3. Individuals with 3.10%
  • Govt had last sold a 5% stake in the steel CPSE in December
  • 2018-19 Disinvestments
  • 2019-20 Disinvestments

The sale of SAIL

  • The government may look to complete the transaction in the current fiscal as it strives to achieve the Rs 65,000-crore  disinvestment target set in the revised estimates.(2019-20)
  • So far this fiscal, ₹34,000 crore has been mopped up from CPSE stake sale and the remaining ₹31,000 crore has to come in by  March-end.
  • Target for 2020-21 ?

What is ‘Offer for sale’?

  • An Offer for Sale is a mechanism where promoters in a listed  company sell their shares directly to the public in a transparent  manner.
  • Promoters dilute their stake by selling their shares.
  • OFS mechanism is used only when existing shares are put on the  block. Only promoters or shareholders holding more than 10 per cent  of the share capital in a company can come up with such an issue.
  • In an OFS, a minimum of 25 per cent of the shares offered, are  reserved for mutual funds (MFs) and insurance companies.

 

 

 

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