MMTC stake sale fully subscribed

The government's offer to sell 9.33-per cent stake in state-run minerals trader MMTC Ltd has received bids for 124 million shares against the 93.3 million shares on offer at the stock exchanges.

The government is divesting 9.33 per cent stake in MMTC at an indicative weighted average price of Rs60.87 apiece against the base price of Rs60.1 per share.

At this price, the sale of 93.3 million shares could fetch the exchequer Rs568 crore.    

The indicative price is way below the market price of MMTC as the scrip is illiquid. However, soon after the commencement of stake sale on the bourses, MMTC scrip hit a low of Rs190.35, down 9.98 per cent, or Rs21.10 a piece over previous close on the BSE.

On the National Stock Exchange, the MMTC stock fell 10 per cent to Rs189.05. The plunge triggered the lower circuit limit for the scrip on both the exchanges.

The empowered group of ministers (EGoM) on divestment headed by finance minister P Chidambaram had cleared the sale of 9.33 per cent stake in MMTL through the offer-for-sale (OFS) route.

The stake sale would help the company meet SEBI''s minimum public shareholding norm.    

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

MMTC had reported a loss of Rs70.62 crore in the 2012-13 financial year, due to a 57 per cent decline in total revenues during the period as compared to previous fiscal. The company had reported a profit of Rs70.72 crore in 2011-12.

The MMTC stake sale kicks off the government's 2013-14 divestment programme that aims to raise Rs40,000 crore from PSU stake sale in 2013-14.

While launching the disinvestment programme today with the sale of MMTC's 9.33 per cent stake, a confident finance minister P Chidambaram said, "I have enough time to achieve the target".

Investment banks Avendus, IDBI Capital Market Services and IDFC are managing the stake sale of MMTC.