CITU Condemns Govt. Move to Divest 10% Stake in SAIL, Says it Will Benefit Corporates

The Centre of Indian Trade Unions (CITU) has condemned the Centre for its “desperate move” to divest ten per cent of its shares in the Steel Authority of India Ltd (SAIL), calling it detrimental to national interest and saying that it would benefit private corporates.

In a statement issued on Thursday, CITU said that the move, which puts “valuable national assets on auction” would result in “detriment of national interests and for the benefits of private corporate.”

SAIL’s stock price reportedly fell by eight per cent on Thursday, a day after the government decided to go ahead with the move. On January 13, the Central Government confirmed the opening of Offer for Sale (OFS) in SAIL for retail and non-retail investors.

“Offer for Sale (OFS) in SAIL opens on Thursday (14.1.2021)for non-retail investors. 15th January (Friday) is for retail investors. GoI would divest 5% equity with a 5% greenshoe option (sic),” Department of Investment and Public Asset Management (DIPAM) Secretary Tuhin Kanta Pandey tweeted on Wednesday.

Offer for Sale (OFS) in SAIL opens on Thursday (14.1.2021)for non-retail investors. 15th January (Friday) is for retail investors. GoI would divest 5% equity with a 5% greenshoe option. pic.twitter.com/EYgA7Nes6a

— Secretary, DIPAM (@SecyDIPAM) January 13, 2021

“Already around 25% percent shares of SAIL have been sold out in the market by successive governments. This time when SAIL has been facing a difficult situation financially, followed by sharp decline in share price to around Rs 74, putting SAIL under further disinvestment tantamount to a shameless sabotage of a Maharatna Company like SAIL with a huge asset base by its owner Govt,” CITU said in its statement.

It added that the move, pushing SAIL towards a phased privatisation process “that too at throw away prices only to benefit the private corporate, both foreign and domestic. The Department of Privatisation under Govt of India, the infamous DIPAM has put SAIL shares under Offer for Sale (OFS) today at a floor price of Rs 64 per share thereby further reducing the offer price from the level of market price.”

According to reports, the floor price for SAIL OFS was set at Rs 64 per equity share. Total OFS was calculated at 206,526,264 equity shares at a face value of Rs 10 each (Base Offer Size), with the option to sell up to 206,526,264 equity shares of SAIL the firm (over-subscription option). The OFS size reportedly is at 413,052,528 shares, the value of which has been estimated at Rs 2,664 crore.

The trade union body said that the entire trade union movement was opposed to such “sabotaging activities” by the government. It said that “reckless disinvestment and privatisation of country’s PSUs” was akin to “facilitating a loot on national assets by private corporate, both foreign and domestic. Decision of disinvestment in SAIL that too at a bottom level offer price is another desperate step in that direction and working people must unitedly oppose such destructive move.”

“CITU calls upon the working class and the steel workers movement in particular to voice their united protest and condemnation to the Govt move for disinvestment of share in SAIL,” it added.