The Narenda Modi government's first disinvestment initiative saw significant interest among investors, with the 5% stake sale in Steel Authority of India (SAIL) fetching ₹1,715 crore.
SAIL's offer for sale (OFS) of 20.65 crore shares was oversubscribed by more than two times; retail investors oversubscribed by an overwhelming 2.5 times, a record in itself in any OFS.
The government had set aside 10% of the total stock on offer for retail investors, apart from offering 5% discount on the floor price of ₹83 per share.
The sale brings down the government's stake in SAIL to 75%, in line with public shareholding norms for listed companies, said a finance ministry statement.
The success augurs well for the government's plan to raise ₹43,425 crore from stake sale in state-run organizations.
Besides, it also plans to raise ₹15,000 crore by offloading stake in non-government companies.
The improved market conditions brighten prospects for the Centre's planned stock offload in ONGC and Coal India.
Faced with sluggish growth in revenue receipts, the government is eyeing disinvestment proceeds to tackle budget deficit.
A team from World Bank is currently on a visit to India at the invitation of the prime minister to suggest key economic reforms and support India's efforts to improve its business environment.