The initial public offering (IPO) of state-run e-commerce and trading company MSTC Ltd made little progress for a second straight day on Thursday, with institutional investors staying away.
The public issue of 17.67 million shares received bids for 2.1 million shares at the end of day two, stock-exchange data showed. The book was subscribed 11.91%.
The portion set aside for retail investors, whose bid value cannot exceed Rs 2 lakh per application, was fully subscribed. It saw demand for 1.84 million shares of the 1.76 million shares reserved for them.
Institutional buyers did not bid for a single share on the second day, while non-institutional investors and eligible employees subscribed to a handful of shares reserved for them, data showed.
Retail investors and MSTC employees will get a discount of Rs 5.50 on the price at which the shares are allotted.
The IPO was subscribed 4.5% at the end of day one on Wednesday.
The IPO, which will close on Friday, comprises a sale by the central government that set the price band at Rs 121-128 apiece for the public float. The company is targeting a valuation of as much as Rs 896 crore ($128.73 million) at the upper end of the price band.
The government will raise Rs 225 crore ($32.2 million) as part of its disinvestment drive. 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 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.