State-run e-commerce and trading company MSTC Ltd has filed a draft prospectus with the Securities and Exchange Board of India (SEBI) to float an initial public offering (IPO).
The IPO will be a sale of nearly 18 million shares by the promoter, which is the government, as part of the disinvestment drive. Of the nearly 18 million shares, 17.6 million will be for the public and rest for eligible employees.
Post the IPO, the government’s holding will drop to 64.85% from 89.85%, and make the promoter compliant with SEBI’s minimum public shareholding norms for listed firms.
MSTC joins a growing list of state-run companies looking to go public. Other government-owned companies preparing for maiden share sales include Rail Vikas Nigam Ltd and Mazagon Dock Shipbuilders Ltd.
VCCircle had previously reported that the government was the biggest beneficiary of the IPO boom in 2017 after taking four state-run companies public. In all, the government raised about Rs 21,118 crore, besides selling stakes in listed firms.
MSTC is engaged in providing e-commerce-related services across diversified industry segment offering e-auction/e-sale, e-procurement services and development of customised software/solutions and also is a major player in trading of bulk raw material.
Equirus Capital Pvt. Ltd is the sole merchant banker arranging and managing the share sale.
MSTC, incorporated in 1964, originally began operations as a trading company to regulate the export of metal scrap. Since then, the company has grown to become a diversified, multi-product services and trading company.
MSTC acted as a canalising agent for import of ferrous scrap until 1992. After de-canalisation, the company has established itself as one of the major players in the trading of bulk industrial raw material and one of the leading e-commerce service providers in the country.