Disinvestment in MMTC, India?s largest PSU with foreign trade as key business, is off the government?s immediate agenda.
According to a senior commerce ministry official, since the government has pinned big hopes on MMTC?s follow-on public offer (FPO), the issue will not be made in a sullen market. ?We are waiting for the right time. The current market condition is not good for disinvestment so it looks tough to launch the (MMTC) FPO in 2012?.
As MMTC?s shares are very thinly traded in the market, it is very difficult to fix the price band, the official said.
Currently, the government holds 99.33% equity in MMTC. It had received a mandatory EGoM approval for splitting each share of face value of R10 into 10 scrips of R1 each and issuing one-to-one bonus shares. MMTC is under the administrative control of the commerce ministry.
Sources say that the government is likely to offload 10% stake in the company.
While the MMTC shares are thinly traded in the market, the floating stock is so limited that it does not reflect the true value of the company, the official said.
Aiming to raise R40,000 crore through disinvestment this fiscal, the government has mopped-up just over R1,000 crore by divesting stake in Satluj Jal Vidyut Nigam, and around R1,000 crore through Engineers India follow-on public offer this fiscal.
Besides MMTC, the government is likely to sell its stake in many firms, including Coal India, ONGC, IOC, SAIL and Hindustan Copper and Power Grid this fiscal.
Last fiscal, it had raised R25,000 crore through stake sale in Oil India, NMDC, REC and NTPC.