Government of India is divesting 9,33,12,000 shares (9.33% stake) in MMTC. It has set a floor price of `60 (72% discount to CMP) for the OFS. We recommend investors to AVOID subscribing to shares due to expensive valuation.
MMTC is a trading company with a Five Star Export House status. However, at the current price, the stock is trading at a very expensive valuation of 398x FY2012 PE due to low free float (0.67% of its market cap). Even at a floor OFS price of `60, it is trading at FY2012 PE of 113x, which is very expensive in our view. Hence, we recommend investors to AVOID subscribing to MMTC OFS.
