The union cabinet has approved divestment in the Steel Authority of India Limited (SAIL) to mobilise a total of RS 16,000 crore through both further public offers (FPOs) and sale of government equity, home minister P Chidambaram said here on Thursday.

Following the two-tranche disinvestment, the government and the company would get Rs 8,000 crore each, the  minister told reporters after a meeting of the Cabinet Committee on Economic Affairs.

Post disinvestment, the government's equity will fall to 69 per cent from 85.82 per cent currently.

The stake sale will take place in two tranches of 10 per cent each, Chidambaram said, adding that each time 5 per cent will be through further public offer (FPO) and another 5 per cent through sale of government equity.

SAIL shares were trading at Rs 248.25, down by 2.67 per cent on the BSE.