Govt shortlists 3 merchant bankers for MMTC stake sale
New Delhi: Government has shortlisted three merchant bankers, including IDFC, for selling 9.33 percent of its stake in MMTC in the current fiscal.
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.
"We will try to do MMTC disinvestment in March. This will also help the company meet minimum 10 percent public holding norm," an official said.
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.
"We have to see how we go about it. We chose such merchant bankers who have the knowledge of handling such issues," the official said.
Of its shareholding of 99.33 percent in MMTC, the government is considering divesting 9.33 percent paid-up equity share capital, comprising shares of face value of Rs 1 each, through an Offer For Sale (OFS).
The merchant bankers, the official said, would focus mainly on domestic investors to subscribe the share sale of MMTC.
"MMTC is a different case. The merchant bankers are working on arriving at the valuation which would be acceptable to investors," the official added.
Shares of MMTC closed at Rs 611.10 on the BSE on Friday. The market capitalisation of the company is Rs 61,110 crore, of which the public free float was Rs 3,055 crore.
Stake sale in MMTC will help government inch towards Rs 30,000 crore disinvestment target fixed for the current fiscal.
Although the government has so far raised just over Rs 6,900 crore, plans are afoot to expedite the process of stake sale in the next two-and-a-half months to meet the target.
The Cabinet has already approved disinvestment in host of state-owned companies including SAIL, MMTC, NALCO, RINL, BHEL and Engineers India.