MMTC shares rally 10% on transfer of stake in Neelachal Ispat Nigam

NEW DELHI: Shares of metals and minerals trading company MMTC on Friday rallied up to 10 per cent as the PSU transferred its 49.78 per cent share in Neelachal Ispat Nigam (NINL) to Tata Steel Long Products (TSLP).

The stock rallied 10 per cent to hit a day's high of Rs 43 on NSE. MMTC shares are down about 35 per cent from their 52-week high at Rs 64.7 hit on January 31.

Earlier, the company had executed a share purchase agreement to sell its entire stake in NINL to TSLP as part of the disinvestment drive of the government.

TSLP had in January emerged as the top bidder, putting in bids worth Rs 12,100 crore for loss-making NINL, which is a joint venture of four CPSEs -- MMTC, NMDC, BHEL, MECON -- and 2 Odisha government PSUs -- OMC and IPICOL.

MMTC was the largest shareholder in NINL holding a 49.78 per cent stake, followed by NMDC (10.10 per cent), BHEL (0.68 per cent), and MECON (0.68 per cent). Besides, 2 Odisha government PSUs -- held 20.47 per cent and 12 per cent stakes, respectively in NINL.

The share purchase agreement was signed on March 10, following which the buyer, NINL and the six selling shareholders worked towards satisfying a set of conditions defined in the SPA, including certification of operational creditor's dues, employees' dues, sellers' operational and financial dues.

TSLP's bid was more than double the reserve or base price of Rs 5,616.97 crore for NINL.