State-run e-commerce firm MSTC's Rs226-cr IPO fully subscribed
18 March 2019
State-run e-commerce firm MSTC Ltd’s initial public offer for Rs226 crore received bids for a total of 19.86 million shares against the 17.67 million shares on the final day of its initial public offering, stock exchange data showed on Friday.
The IPO, expected to raise as much as Rs226 crore, was 1.12 times subscribed, with investors bidding for 19.9 million shares, stock exchange data showed.
The government, which owns an 89.85 per cent stake in MSTC, is aiming to sell up to 25 per cent of its share.
MSTC has extended its initial public offer and cut its price band after failing to get enough bids from institutional buyers, reports citing sources close to the development said.
MSTC had priced its IPO at between Rs121 and Rs128 per share.
The portion set aside for retail investors, whose bid value cannot exceed Rs2 lakh per application, was subscribed 2.8 times while the quota for non-institutional investors was covered 1.7 times.
However, the quota of shares for institutional buyers was covered only about 80 per cent. About 75 per cent of the total issue is reserved for institutional buyers, and a full subscription is essential for an issue to go through. There was not a single bid from institutional investors in the first two days of IPO.
The share sale in the e-auctioning, trading and recycling group comes as appetite for Indian equities picks up ahead of the general election due in May.
Kolkata-headquartered MSTC had filed its IPO proposal on 1 February. It received regulatory approval on 28 February.
MSTC joins a growing list of state-run companies looking to go public. Other government-owned companies preparing for maiden share sales include Rail Vikas Nigam Ltd and Mazagon Dock Shipbuilders Ltd.
MSTC provides e-commerce-related services across industry segments. It offers e-auction and e-procurement services and develops customised software. It is also a major player in the trading of bulk raw material.
Equirus Capital Pvt. Ltd is the sole merchant banker managing the share sale.
MSTC, incorporated in 1964, originally began operations as a trading company to regulate the export of metal scrap. Since then, the company has grown to become a diversified, multi-product services and trading company.