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Decision deferred
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New Delhi, March 12: An inter-ministerial panel today decided to postpone the stake sale in state-run metal and mineral trader MMTC Ltd after rejecting the equity valuations by merchant bankers.
“The empowered group of ministers (EGoM) on disinvestment did not accept the merchant bankers’ recommendation on valuation,” divestment secretary Ravi Mathur said.
He, however, declined to divulge whether the government felt the valuation was below or above its expectations or market trends.
The government, which holds 99.33 per cent in MMTC, a listed firm, planned to sell a 9.33 per cent stake through an auction tomorrow to raise funds to reduce the fiscal deficit, which is estimated at 5.2 per cent of the gross domestic product (GDP) this fiscal.
The market capitalisation of the company is Rs 28,600 crore, of which the public free float is worth about Rs 1,430 crore.
The government could have raised Rs 2,910 crore by selling MMTC shares at the current price of Rs 311.90 apiece on the Bombay Stock Exchange.
The Centre had initiated the process of investor meets to sell the shares with roadshows in Mumbai and Pune.
Late last year, a similar disagreement over pricing had led to the government postponing the initial public offering of Rashtriya Ispat Nigam Ltd.
The finance ministry had set a target to raise Rs 30,000 crore through PSU divestments this fiscal. It has so far raised Rs 21,500 crore.
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