An inter-ministerial panel, on Tuesday, deferred the government’s 9.33 per cent stake sale in state-owned trading company MMTC on concerns over valuation of the company’s equity.
“The MMTC issue has been deferred for now... The EGoM did not accept the recommendations of the merchant bankers on valuation issues,” Disinvestment Secretary Ravi Mathur told reporters after the meeting. The issue was scheduled to hit the markets on March 14.
Mr. Mathur, however, did not say as to when the EGoM would meet next to decide on the MMTC stake sale.
According to sources, the sale is likely to be shifted to 2013-14. The Empowered Group of Ministers (EGoM) on disinvestment, headed by Finance Minister P. Chidambaram was slated to decide on the base price of the MMTC stake sale. Shares of MMTC were trading at Rs.317 on the BSE.
Since the public float of the company is very less, sources said the merchant bankers had a tough time in evaluating the share sale price which would be acceptable to investors. The government was expecting to raise Rs.250-300 crore through the stake sale.
The stake sale would have enabled the company meet the minimum 10 per cent public holding norm stipulated by market regulator SEBI.
Of its shareholding of 99.33 per cent in MMTC, the government is considering divesting 9.33 per cent paid-up equity share capital.
To decide on Nalco issue today
Meanwhile, the inter-ministerial panel on disinvestment is scheduled to meet on Wednesday to decide on the sale price of Nalco equity, sources said, adding that similar meeting for SAIL would be held next week.
“The EGoM is scheduled to meet tomorrow and decide on the Nalco base price,” they said, adding that the issue could hit the market on March 15. The disinvestment of Nalco and SAIL could together fetch around Rs.4,000 crore to the exchequer, sources said.
At the current market price, the disinvestment of 12.5 per cent or 31.31 crore shares of Nalco is expected to fetch around Rs.1,400 crore to the exchequer. Shares of Nalco closed at Rs. 45.25, down 0.11 per cent on the BSE.
