MMTC stake sale likely on June 13; EGoM may meet tomorrow

NEW DELHI: The panel of ministers on disinvestment is likely to meet tomorrow to decide on the base price for MMTC stake sale, the issue of which is expected to hit the market on June 13.

"The EGoM is scheduled to meet tomorrow to derive at the base price for divesting 9.33 per cent stake in MMTC," an official said.

The Empowered Group of Ministers (EGoM) is headed by Finance Minister P Chidambaram.

The government expects to raise Rs 250-300 crore through the stake sale and the base or floor price would be "nowhere near the current market price".

Shares of MMTC closed at Rs 205.45 a piece on the BSE, down 4.42 per cent over the previous close.

The government currently holds 99.33 per cent stake in MMTC and the stake sale would help the company to meet Sebi's minimum public shareholding norm.

The stake sale, which was originally slated to take place in March, was then deferred on valuation concerns.

Since the company's audited results are out now and after reviewing the final balance sheet for the last fiscal, the disinvestment department would be able to decide on the base price for offer for sale (OFS).

This will help in knowing the real value of the shares of MMTC, the official said.

In the 2012-13 fiscal, MMTC reported a loss of Rs 70.62 crore, due to 57 per cent decline in total revenues during the period as compared to previous fiscal. The company had reported a profit of Rs 70.72 crore in 2011-12.

The DoD had shortlisted three investment bankers -- Avendus, IDBI Capital Market Services and IDFC -- to manage the 9.33 crore shares or 9.33 per cent stake sale of the PSU.