Govt defers decision on MMTC stake sale till July

The government has deferred a decision to sell its 9.33% stake in MMTC till July as it is awaiting the state-run trading firm's audited earnings for the 2012-13 fiscal for deriving the true value of its equity.

The stake sale, which was originally slated to take place in March, was then deferred until the April-June quarter on valuation concerns.

The Department of Disinvestment (DoD) would now decide on the MMTC offer for sale (OFS) only in July after reviewing the final balance sheet for 2012-13 fiscal, government sources said.

"We could not do the valuation of MMTC's equity as the balance sheet for 2012-13 financial year is not yet ready. Once the balance sheet is finalised, we will get to know the real value of the shares," sources said.

"For valuation of the company, the assets and other things have to be taken into account, which could be done only after the company's audited balance sheet is available," he said, adding that MMTC's audited results for 2012-13 fiscal is likely to be announced in July.

However, the final call on base price of the MMTC stake sale will be taken by the Empowered Group of Ministers (EGoM), headed by Finance Minister P Chidambaram, he added.

The government was expecting to raise Rs 250-300 crore through the stake sale. The stake sale in MMTC is essential to meet the minimum 10% public holding norm stipulated by the market regulator SEBI.

Shares of MMTC closed at Rs 262.05 a piece on the BSE, down 2.98% over the previous close.

The DoD had shortlisted three investment bankers Avendus, IDBI Capital Market Services and IDFC to manage the 9.33 crore shares or 9.33% stake sale of the PSU.