New Delhi - Government's disinvestment drive got a tremendous start Friday, with steel major SAIL's share sale being subscribed more than two times fetching the exchequer Rs 1,715 crore.

The first disinvestment offering this fiscal saw retail investors lapping up SAIL shares taking the overall subscription to 2.08 times (42.93 crore shares) of the 20.65 crore shares on offer.

Government's stake in SAIL will come down to 75 percent pursuant to this public issue, helping the company to meet Sebi's listing norms.

Government has set a target of Rs 43,425 crore through selling stakes in various PSU firms during the current fiscal.

The Offer For Sale (OFS) got bids for 42.93 crore aggregating to over Rs 3,400 crore but with the government not opting for the green shoe option, only Rs 1,715 crore would come to the exchequer.

"OFS for disinvestment of 5 percent of government equity in SAIL successfully concluded, to fetch Rs 1,715 crore approximately for the government," a Finance Ministry statement said.

The offering for SAIL shares also received a robust response from retail investors, to whom the government has offered a five percent price discount and has reserved 10 percent or over 2 crore shares for them.

2.06 crore shares, or 10 percent, which were earmarked for retail investors were subscribed 2.66 times, while the general category shares were subscribed 2.01 times, according to BSE data.

"Retail investors category was... Hugely oversubscribed more than 2.5 times, a record for any retail participation in any OFS," the statement added.

A successful start to the ambitious disinvestment programme will help government contain the fiscal deficit to 4.1 percent of the GDP in the current financial year.

Government has lined up a host of PSUs to pare holdings. The disinvestment plan includes 5 percent stake sale in ONGC, 10 percent in Coal India and 11.36 percent in NHPC.

SAIL is probably the first OFS in which stock exchanges are showing retail and general category subscription with their respective indicative price separately.

The floor, or the minimum offer, price for SAIL's share sale has been set at Rs 83 apiece, which is 2.75 percent less than yesterday's closing price.

On the BSE, the SAIL scrip closed below the OFS floor price at Rs 82.80, down 2.99 percent over previous close. The Cabinet had in July 2012 approved 10.82 percent stake sale in SAIL. Accordingly, the first tranche of disinvestment of 5.82 percent was completed in March 2013, which fetched over Rs 1,500 crore to the exchequer.

The government has missed its disinvestment target for five consecutive financial years. In 2010-11 and 2011-12 fiscals, the government had raised Rs 22,144 crore and Rs 13,894 crore through disinvestment, against the budgeted target of Rs
40,000 crore in each year.

In 2012-13 fiscal, the government had raised Rs 23,956 crore, against the target of Rs 30,000 crore. In 2013-14, Rs 16,027 crore was realised against target of Rs 40,000 crore. (PTI)