This ad will auto close in 10 seconds

MMTC stake sale on March 14; could fetch Rs 300 cr

Last Updated: Sunday, March 3, 2013 - 13:28

New Delhi: The government's offer-for sale for offloading 9.33 percent stake in trading giant MMTC is likely to hit the markets on March 14, which could rake in about Rs 300 crore to the exchequer.

The Empowered group of Ministers (EGoM) on disinvestment, headed by Finance Minister P Chidambaram, is scheduled to meet on March 12 to decide on the floor price for the proposed stake sale.

"The EGoM for MMTC is scheduled to meet on March 12 and the issue is likely on March 14," official sources said.

Government has shortlisted three merchant bankers, including IDFC, for selling over 9.33 crore shares or 9.33 percent of its stake in MMTC in the current fiscal through an Offer For Sale (OFS).

Since the public float of the company is very less, the merchant bankers are in the process of evaluating the valuation of the shares which will be acceptable to investors.

"We are expecting somewhere between Rs 250-300 crore through the stake sale," another official said.

Shares of MMTC were trading at around Rs 406 apiece on the BSE.

The Department of Disinvestment (DoD) has shortlisted three investment bankers - Avendus, IDBI Capital Market Services and IDFC - to manage the stake sale of the PSU.

The stake sale would also help the company meet minimum 10 percent public holding norms.

The DoD has initiated the process of investor meet for selling shares in the 'Miniratna' PSU, whose current public float is very less and hence the market valuation is too high.

The roadshows for the stake sale were held in Mumbai and Pune, an official said, adding that the roadshows focused mainly on domestic investors.

Of its shareholding of 99.33 percent in MMTC, the government is considering divesting 9.33 percent paid?up equity share capital.

"MMTC is a different case. The merchant bankers are working on arriving at the valuation which would be acceptable to investors," the official added.

The market capitalisation of the company is Rs 40,660 crore, of which the public free float was Rs 2,033 crore.

Stake sale in MMTC in the current fiscal will help government inch towards Rs 24,000 crore disinvestment target as per revised estimates, lower than Rs 30,000 crore as estimated in budget.

The government has so far raised over Rs 21,500 crore through stake sale and plans are afoot to expedite the process of stake sale in the remaining weeks to meet the target.

Apart from MMTC, the government is likely to divest stake in SAIL, NALCO and Rashtriya Chemical and Fertilisers (RCF) in fiscal ending March 31.


First Published: Sunday, March 3, 2013 - 13:27
comments powered by Disqus