"Government expects to garner Rs 1,500 crore to Rs 1,700 crore from SAIL disinvestment. Floor price will be Rs 83 and retail investors will get a discount of 5 percent," an official said after a meeting on SAIL disinvestment in the Finance Ministry.
The SAIL offering would be the first PSU share sale under the new government, which targets to raise Rs 43,425 crore through share sales in various state-owned firms during the ongoing fiscal.
Retail investors would get a discount of 5 percent to the bid price in the SAIL offering.
The floor price of Rs 83/share indicates a 2.75 percent discount to the closing price of SAIL scrip that ended 0.35 percent down at Rs 85.35 on the BSE.
The sale of 5 percent stake, or about 20.65 crore shares, of SAIL at the current market price would fetch the exchequer about Rs 1,700 crore.
As much as 10 percent of the offered shares has been reserved for retail investors, who can buy shares worth up to Rs 2 lakh in the share sale. A minimum of 25 percent of the issue size would be reserved for mutual funds and insurance companies.
The Cabinet had in July 2012 approved a 10.82 percent stake sale in SAIL. Accordingly, the first tranche of disinvestment of 5.82 percent was completed in March 2013.
The government has lined up a host of PSUs to pare its holdings. The disinvestment plan includes 5 percent stake sale in ONGC, 10 percent in Coal India and 11.36 percent in NHPC.
HSBC Securities, Deutsche Equities, J P Morgan India are among the six merchant bankers advising the SAIL stake sale.
While the new government assumed power in late May, there have been no PSU share sale so far in the current fiscal. During the previous 2013-14 fiscal, government has raised Rs 1,500 crore from sale of SAIL shares while the entire disinvestment proceeds stood at over Rs 16,000 crore.

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