State-owned MSTC Ltd is mulling an additional 10 per cent equity issue, following the government's proposed dilution of stake in the trading and e-commerce services company.
The Centre has proposed to offload 25 per cent stake in MSTC through the offer for sale (OFS) route, and the process is likely to be completed by March 2019. The divestment would bring down government holding to 64 per cent from 89.85 per cent.
"We are are in need of capital to meet our expansion plans. We are exploring options for 10 per cent fresh equity issue, as the government's dilution of stake will not bring any capital to the company," a top MSTC official told PTI.
MSTC has been expanding its areas of e-commerce and online auction, including ferrous and non-ferrous materials. It is also holding e-auctions for mines as well as agri-products.
The company has targeted north eastern states like Tripura, where it sees huge demand for e-auction services in agri-products, but needs more capital to go ahead with the plan, MSTC officials said.
It has identified 25-30 agri products for e-auction, including turmeric, oranges, kiwis and large cardamoms, they said
In the current fiscal, MSTC had conducted e-auction of ginger, winning contracts of 1,000 tonne. However, owing to logistics issues, only 100 tonne could be delivered.
MSTC officials are hopeful that such bottlenecks can be resolved through inland waterways.
The Inland Waterways Authority of India developing waterways to connect the north east via Bangladeshi waters will come as a boon, the officials said.
MSTC is aiming at a net profit of Rs 100 crore in the 2018-19 fiscal from Rs 76 crore registered in 2017-18.