The government is planning to sell up to 25% stake in two PSUs - MSTC and NEEPCO through initial public offerings (IPOs). The government currently holds 89.85% stake in Metal Scrap Trading Corporation (MSTC) and the balance 10.15% is held by the members of the Steel Furnace Association of India and Ispat Industries Ltd.
MSTC is a PSU trading firm like MMTC and STC. The government has a 100% holding in NEEPCO, which provides about 35% of the energy requirement of the North East region. NEEPCO has a portfolio of hydro, thermal and renewable (solar) projects.
The Department of Investment and Public Asset Management (DIPAM) has invited bids by 16 August, 2017 from merchant bankers to manage the IPOs of these two mini-ratna PSUs which are under the administrative control of steel and power ministries, respectively.
The government will appoint up to four merchant bankers for NEEPCO and two for MSTC. It is looking to sell up to 25% stake in each of the two firms.
The authorized share capital of MSTC is INR 50 crore, while paid up equity is INR 17.60 crore as on 31 January, 2017. The profit after tax for the fiscal 2016-17 was INR 61 crore. As on 31 March, 2017, it has a net worth of INR 528.60 crore.
The authorized share capital of NEEPCO is INR 5,000 crore and paid up equity capital was INR 3,452.81 crore as on 31 March, 2017. The profit after tax for 2015-16 was INR 372.55 crore and it has a net worth of INR 5,988.28 crore.