Merchant bankers for MMTC divestment likely this week

Nov 04 2012, 16:47 IST
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SummaryThe Government is likely to finalise this week appointment of merchant bankers for selling its 9.33 per cent stake in MMTC.

The Government is likely to finalise this week appointment of merchant bankers for selling its 9.33 per cent stake in MMTC.

Three investment bankers -- Avendus, IDBI capital Market Services Ltd and IDFC -- are scheduled to make presentations before an Inter-Ministerial Group (IMG) on November 8.

"Financial bids will be opened immediately after the presentations," the Department of Disinvestment said.

The government is considering disinvestment of 9.33 per cent paid-up equity share capital of MMTC comprising 9.33 crore shares of face value of Re one each through 'offer for sale' route, commonly known as auction route.

MMTC, which became public in 1992, had split its share of face value of Rs 10 each into 10 shares of face value of Rs 1 each in July 2010. It's paid up capital is Rs 100 crore.

After disinvestment, the government's share in the trading major will come down to 90 per cent.

Shares of the MMTC closed at Rs 763.75 apiece on Friday on the BSE, up 6.7 per cent from previous day close.

At the existing market price, the government could earn about Rs 7,125 crore by diluting its stake.

Financial bids of technically qualified legal advisers for the disinvestment too will be opened on November 8.

Luthra & Luthra, Khaitan & CO, Link Legal and Amarchand Mangaldas, are among the six entities scheduled to make presentation on Thursday to become legal advisers for the government's stake sale programme in MMTC.

After taking Finance portfolio in August, P Chidambaram had asked officials to expedite the process of disinvestment so that state-owned firms could hit stock markets in time and help government achieve the target of Rs 30,000 crore in 2012-13.

In September, the government approved the minority stake sale in four PSUs -- NALCO, MMTC, Hindustan Copper, NMDC – which is likely to fetch around Rs 15,000 crore.

While the government is aiming at Rs 30,000 crore from stake sales in various PSUs this fiscal, no disinvestment has taken place so far.

Department of Economic Affairs (DEA) Secretary Arvind Mayaram recently said government was hopeful of raising Rs 12,000-13,000 crore from disinvestment by December-end.

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