Govt starts intial work on MMTC sell-off plan

The Disinvestment Department has begun preliminary work on the sell-off plan for trading giant MMTC, which, along with about 40 listed PSUs, needs to raise public holding to a minimum of 10 per cent.

"The Disinvestment Department has asked us for some details like the time when we first sold our shares, at what price and details like price-to-earning ratio," MMTC Chairman and Managing Director Sanjiv Batra said here today.

However, Batra said that it could take at least one year to come out with a follow-on public offer.

"The process is long. It takes not less than 12 months to hit the market," he said.

The Cabinet Committee on Economic Affairs had decided on November 5 that all Central Public Sector Enterprises should take the public holding to at least to 10 per cent of their capital.

The move was seen as the government attempt to bridge a wide fiscal deficit which has ballooned to 6.8 per cent of GDP in the current fiscal because of the stimulus package and economic slowdown.

The government has a 99.3 per cent stake in the company, which gets half of its Rs 36,000 crore business from import of about 140 tonnes of gold.

MMTC is the second most valued PSU on the Bombay Stock Exchange. As close today, the market capitalisation of MMTC stood at Rs 1,88,450 crore. The shares of the company closed at Rs 37,689.95.