Exclusive: Finmin agrees with the Commerce Ministry's closure of MMTC plan

Exclusive: Finmin agrees with the Commerce Ministry's closure of MMTC plan

Exclusive: Finmin agrees with the Commerce Ministry's closure of MMTC plan

The government has said that the company's closure was due to a lack of interest from investors.

In September 2023, MMTC's quarterly net profit dropped by 98% from Rs 1,117.19 crore to Rs 10.67 crore.

According to a top government official, the Finance Ministry has backed the closure of the Metals and Minerals Trading Corporation of India (MMTC) since there isn't much interest from investors in the business.

MMTC was founded in 1963 and is governed by the Ministry of Industry and Commerce.

"The Finance Ministry's view on MMTC was requested by the Commerce Ministry. Since there is no investor interest in the PSU, the finance ministry recommended that it be closed, the official told Moneycontrol.

A panel made up of Finance Minister Nirmala Sitharaman, Road Transport and Highways Minister Nitin Gadkari, and Commerce Minister Piyush Goyal will make the ultimate decision once the Commerce Ministry proposes closing MMTC.

Only a small number of the approximately 21 PSUs that are losing money have been given the go-ahead for shutdown by the government.

Because it results in a significant loss of jobs, closing a PSU is more challenging than disinvestment.

The Department of Public Enterprises under the Finance Ministry will oversee the closure of MMTC if the Union Cabinet gives its approval. This department is responsible for overseeing PSU closures.

The government owns 89.93% of MMTC, which is less than the required minimum of 25% of public shares. The sale of MMTC's 9.33 percent interest was authorized by the Cabinet Committee on Economic Affairs via a proposal for sale in 2012, however the transaction did not take place.

2020 saw the in-principle approval by CCEA of a strategic disinvestment in MMTC via the sale of a 49.78 percent interest.

On August 9, 2023, however, Anupriya Patel, the minister of state for trade and commerce, told the Lok Sabha that the government has not made a decision about the strategic disinvestment of MMTC.

From Rs 1,117.19 crore in September 2022 to Rs 10.67 crore in September 2023, MMTC's quarterly net profit fell by 98%. A 97% decline in net sales to Rs 1.81 crore occurred.

The company's shares have gained by almost 72% during the last year.

The Securities and Exchange Board of India revoked MMTC's stockbroker license in August 2023 because of the company's participation in unlawful "coupled contracts" in a case involving the former National Spot Exchange.