Steel Authority of India (SAIL) has approached the Finance Ministry's Department of Investment and Public Asset Management (DIPAM) for a 5 percent follow-on public offer (FPO) this fiscal year, according to reports from Moneycontrol. The state-run steelmaker is looking to raise capital through this fresh share sale to fund its expansion plans, marking a departure from traditional government stake sales where proceeds typically go to the government exchequer. As a person directly aware of the matter told Moneycontrol, "For SAIL, the thinking is slightly different. The company wants to raise money for itself, unlike an Offer for Sale (OFS), where the proceeds go to the Government of India. They are looking at an FPO-type route so that the company receives the funds."
The distinction between FPO and Offer for Sale (OFS) routes is central to SAIL's strategy. In an OFS, the government sells shares it already holds and retains the proceeds, while in an FPO, the company issues fresh equity to the public, with funds going directly into the company's books rather than to the government. The government currently holds 65% equity in SAIL, and while an FPO would still reduce government shareholding as the company's equity base expands, it would generate no direct revenue for the exchequer. This marks a departure from most public sector stake sales planned this fiscal, which have largely relied on the OFS route to add to the government's disinvestment collections.
SAIL operates as a Maharatna central public sector enterprise under the Ministry of Steel and is India's largest state-owned steelmaker, running five integrated plants at Bhilai, Bokaro, Rourkela, Durgapur and Burnpur, along with three special steel plants. According to Moneycontrol, the company's crude steel output for the quarter was 4.76 million tonnes, compared to 4.85 million tonnes in Q1 FY26, while sales fell to 4.16 million tonnes from 4.55 million tonnes in the year-ago period. However, the company posted a more than two-fold jump in consolidated net profit to ₹1,644.05 crore for the June quarter, aided largely by lower expenses. SAIL Chairman Ashok Kumar Panda noted that the domestic steel industry had shown resilience amid global uncertainties, backed by sustained demand in domestic steel consumption.
SAIL has been ramping up capital expenditure in recent years to expand production capacity across its plants, as reported by Moneycontrol. A fresh equity issue would provide the company with an additional funding avenue for this expansion, without relying solely on internal accruals or debt. The proposed FPO represents a strategic move to support the company's growth initiatives while maintaining its position as India's largest state-owned steelmaker. The timing of this proposal comes at a time when SAIL's quarterly earnings have shown sharp improvement even as output slipped, demonstrating the company's operational efficiency and financial resilience.
