MMTC stake sale offer likely to hit markets this month: report
The Department of Disinvestment (DoD) is planning to launch this month or early May the 9.33 per cent stake sale in MMTC, which could fetch around Rs 300 crore to the exchequer.
The Disinvestment department is waiting for the equity markets to stabilise before doing the stake sale of MMTC, a source in the Finance Ministry said.
"We are planning to do MMTC issue this month or early next month. The base price for stake sale would be in double digit," the official said.
Shares of MMTC closed at Rs 226.50, down 2.54 per cent on the Bombay Stock Exchange.
The government had shortlisted three merchant bankers for selling over 9.33 crore shares or 9.33 per cent of its stake in MMTC in the current fiscal through an Offer For Sale (OFS).
The shortlisted investment bankers are Avendus, IDBI Capital Market Services and IDFC for managing the stake sale of the PSU.
The government is expecting to raise Rs 250-300 crore through the stake sale.
Since the public float of the company is very less, sources said the merchant bankers had a tough time in evaluating the share sale price which would be acceptable to investors.
The market capitalisation of the company is Rs 22,800 crore, of which the public free float is worth just about Rs 1,140 crore.
MMTC could be the first PSU to hit markets in the current fiscal year. The government plans to raise Rs 40,000 crore by way of disinvestment in 2013-14.
In the last fiscal year (2012-13), the government had raised Rs 23,920 crore through disinvestment.
MMTC stake sale, which was originally slated for March, was deferred by an inter-ministerial panel on disinvestment. The stake sale would enable the company meet minimum 10 per cent public holding norm stipulated by market regulator Sebi.
As per the regulation, PSUs have to bring down their promoter holding to 90 per cent by August this year.