The SAIL offering would be the first PSU share sale under the new government, which targets to raise Rs 43,425 crore through selling shares in various state-owned firms during current fiscal.
The SAIL scrip ended 4.67 percent lower at Rs 85.65 on the BSE, while the floor price for the Offer-For-Sale would be determined tomorrow.
The sale of 5 percent stake or about 20.65 crore shares of Steel Authority of India Ltd (SAIL) at the current market price of Rs 85.65 apiece would fetch the exchequer over 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.
"Retail investors will be allocated shares at a discount of 5 percent to the bid price entered by them," an NSE circular said, adding that the final allocation price may be below the floor price.
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, goverment 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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