State-owned SAIL's 20 per cent share sale plan, which aims to generate up to Rs 16,000 crore, may not happen in 2010 due to certain regulatory hurdles.
"SAIL share sale may not come in 2010 as it (SAIL) is still not SEBI compliant for the Follow-on Public Offer. It has to appoint independent directors on its board, a proposal of which is lying with the Appointments Committee of the Cabinet (ACC). But the FPO may come during the January-March period," a top government official said.
Earlier in July, Steel Secretary Atul Chaturvedi had expressed the hope that the FPO could hit the market by October-November in 2010.
The country's largest steelmaker has 12 official directors onboard, besides two independent directors. The company would have to hire at least 10 more independent directors to become SEBI compliant.
However, the company has proposed to trim the total board strength to 18, consisting of nine officials and an equal number of independent directors.
Chaturvedi had said that he was hopeful of getting clearance for restructuring the SAIL board from the Appointments Committee of the Cabinet (ACC) by July. However, the official said that ACC has not cleared the proposal yet.
SAIL is in the process of restructuring its board mainly for expediting decision-making, keeping in mind its estimated Rs 70,000-crore expansion programme.
In April, the government had cleared a proposal to sell 20 per cent equity in the country's largest steelmaker. The share sale would see the government offloading 10 per cent of its stake in the steel maker, while the company would raise fresh equity in the same proportion.
The government, at present, holds a little over 85 per cent stake in SAIL and post-FPO, its equity in the company is expected to go down to about 69 per cent.
Steel Minister Virbhadra Singh had recently said that the FPO could generate Rs 16,000 crore.
SAIL's shares closed on Friday at Rs 206.90, up 0.07 per cent on the Bombay Stock Exchange, against the previous close.