State-run e-commerce and trading company MSTC Ltd will float its initial public offering this week and is aiming at a valuation of as much as Rs 896 crore ($128.73 million).
The IPO is entirely a sale of shares by the government and the company is not raising any fresh capital. The government has set a price band of Rs 121-128 apiece for the public float, the company said on Monday.
The IPO will open on Wednesday and close on Friday. Retail investors and MSTC employees will get a discount of Rs 5.50 on the price at which the shares are allotted.
The government will raise Rs 225 crore ($32.2 million) by selling nearly 17.67 million shares as part of its disinvestment drive.
Of the total 17.67 million shares, 70,400 shares are reserved for the employees while 1.76 million shares are reserved for retail investors.
After the IPO, the government’s holding will drop to 64.85% from 89.85%, thereby making MSTC compliant with the minimum public shareholding norms for listed companies.
Kolkata-headquartered MSTC had filed its IPO proposal on 1 February. It received regulatory approval on 28 February.
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.
MSTC provides e-commerce-related services across diversified industry segments. It offers e-auction and e-procurement services and develops customised software. It is also a major player in trading of bulk raw material.
Equirus Capital Pvt. Ltd is the sole merchant banker 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.