EGoM to decide on MMTC stake sale floor price tomorrow

NEW DELHI: An inter-ministerial panel is likely to decide tomorrow the floor price for 9.33 per cent stake sale in MMTC, which can fetch around Rs 300 crore to the exchequer at current rates.
The Empowered Group of Ministers (EGoM) on disinvestment, headed by Finance Minister P Chidambaram, is likely to meet tomorrow to decide on the base price for the share sale, sources said.

The share sale is likely to hit the markets on March 14, they added.

Government has shortlisted three merchant bankers, including IDFC, 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).

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 closed at Rs 296.45 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 per cent 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 per cent in MMTC, the government is considering divesting 9.33 per cent 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. PTI