MSTC Limited IPO

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Background of the Company

MSTC Limited is under the administrative control of the Ministry of Steel of MSTC Limited, Government of India, PSU of Mini Ratna category-I The company was established on September 9, 1964, as a regulatory authority for the export of iron scrap. The Government holds 89.85% stake in the company. It was a canalizing agency for importing iron scrap and breaking old vessels until 1992.

MSTC became a subsidiary of SAIL in 1974. In 1982, it got delinked from SAIL and became an independent company under the Ministry of Steel.

MSTC is making rapid progress in e-commerce sector to promote e-governance in all sectors of the economy. MSTC today is rendering its services to steel and petrochemical sectors for raw material support and seamless e-commerce services with an innovative approach to various PSUs, Central Government/State Government and private sector companies. Successful e-auction of coal blocks is yet another feather in MSTC’s cap and MSTC today stands taller than yesterday. It is the most preferred service provider and various Central PSUs, State Governments are engaging MSTC on nomination basis based on its strong credentials.

To promote e-commerce, MSTC has emerged as a major player in the country. Its e-auction portal, www.mstcecommerce.com has become a very popular tool for businesses to transact business transparent and fairly. Portal sellers and buyers provide a virtual market for doing business in metal scraps (iron / non-ferrous), surplus stores, plants and machinery, obsolete parts, vehicles, minerals, forests, and agricultural products, real estate etc.

MSTC has recently also developed an e-procurement portal, which can be adapted to meet customer needs. It has made itself a place to provide customized digital solutions and has emerged as a large e-commerce company in the B2B and B2C area.

New Initiatives

1. e-Commerce in Agricultural and Forest products like tobacco, tendu leaf, timber, etc.

2. e-Commerce in Mineral products like Iron Ore, imported thermal coal, chrome, manganese ore etc.3

3. Recently, MSTC has set up an auto- shredding plant through a JV company with Mahindra Group. This is one of its own kind in India and will go a long way in recycling special grade steels besides substituting imports for such materials.

Subsidiaries/Joint Venture of MSTC

Subsidiary Company – Ferro Scrap Corporation Limited (FSNL) was formed in 1979 as a joint venture company. During 2002-03, FSNL became a 100% subsidiary of MSTC. FSNL is mainly engaged in the recovery of Ferro scrap and reddish iron metal from the slag mugs and debris arising out of iron and steel making in steel plants.

Joint venture company MSTC had set up a joint venture company M / s Mahindra MSTC Recycling Private Limited for the first Auto Shredding Plant in India to convert End Life Vehicle (ELV) and other white goods into a shedding scrap, which is for secondary steel There is important raw material. In the first phase, with the principles of environmentally friendly management, modern technology is being set up in Greater Noida and collection centers are being set up.

MSTC Limited IPO Stock Quote & Charts

96.35

+2.94%

  • Open: 95.90
  • High - Low: 97.95 - 89.10
  • Previous Close: 93.60
  • Total Traded Volume: 18227
  • Updated On: 13-Sep-2019

Objects of the MSTC Limited IPO:

The objects of this Offer are: (i) to carry out the disinvestment of 17,670,400 Equity Shares by the Selling Shareholder in our Company constituting 25.10% of our Company’s pre-Offer paid up Equity Share capital. (ii) to achieve the benefits of listing the Equity Shares on the Stock Exchanges.

MSTC Limited IPO Details:

Open Date: Mar 13 2019
Close Date: Mar 20 2019
Total Shares: 17670400
Face Value: ₹ 10 Per Equity Share
Issue Type: Book Built Issue IPO
Issue Size: 226.18 Cr.
Lot Size: 90 Shares
Issue Price: ₹ 121-128 Per Equity Share
Retail Discount: 5.5 Per Equity Per Share
Listing At: NSE,BSE
Listing Date: Mar 29 2019

Promoters And Management:

The Promoters of the company is Govt. of India.

Company Business:

a) The Business area of MSTC includes selling of agency business, e-sales of scrap and other commodities, e-procurement etc. b) Customized e-commerce solutions have emerged as major innovative business models of MSTC. They have developed Exim Portal for Petroleum Industry, Online Draw System for selection of LPG dealership, e-RaKAM (e-Rashtriya Kishan Agri Mandi) Portal etc., to name a few. c) E-auction of sand Mining blocks in UP and exim-products of IOCL have been the signature events in the recent past. d)The trading business, which comprises of import and import financing through BG backed model, contributed to 35% of the total operational income. MSTC also supplied imported coal worth 272 Crore to power generating companies. e) MSTC has taken many steps with a view to benefit the farmers of entire North East Region. MSTC and other stakeholders including NABARD, NERAMAC, CRWC, FPOs, etc. are working together for the overall development of the Agri-horti EcoSystem in the North East Region. The MSTC plans to enter into umbrella agreement with the State Government of the North East States for providing complete e-commerce solutions with a focus on Agri-Horti products.

Financials of MSTC Limited IPO:

 
Year Revenue(Cr) Expense(Cr) PAT(Cr) FV Debt Equity(Cr) NW(Cr) Debt/NW EPS
2017 1876.2 1692.8 133 10 688 352 406 1.69 18.89
2018 2793.1 2758.3 -9.7 10 766 352 366 2.09 -1.38
6MFY18 1491.5 1450.0 -12.1 10 298 704 327 0.91 -1.72
IZ Review 1. The Company has shown excellent growth in terms of Revenue in the last 3 years. 2. The company went into a loss in the FY17-18 due to bad debt written off. 3. The company's debt/equity is under 1. 4. The Mcap of the Company is 851 Cr and EV of 1100 Cr. 5. The Company has an EBITDA of 114 Cr in FY18. 6. The Valuation in terms of EV/EBITDA at 9.69 looks reasonable. The Retail discount of 5.50 will act as a cherry.

Comparison With Peers:

There is no peer in the listed space.

Recommendation on MSTC Limited IPO:

Review and Recommendation of MSTC Limited IPO from IZ team is: 4/10. [ The Company has come up with a Reasonable Valuation in terms of P/B of 2.78 and EV/EBITDA of under 10. The loss of FY18 is due to bad debt written off by the company to clean its balance sheet. ]

Lead Manager of MSTC Limited IPO:

  1. Equirus Capital Private Limited

Registrar of MSTC Limited IPO:

  1. Alankit Assignments Limited

Bid Details of MSTC Limited IPO as on
20-Mar-2019 17:00:00 IST

No.of shares offered No. of shares bid No. of total times
13,200,000 14,860,710 1.13
2,640,000 5,665,860 2.15
1,760,000 5,193,990 2.95
70,400 108,540 1.54
- - -
17,670,400 25,829,100 1.46
No.of shares offered No. of shares bid No. of total times
13,200,000 3,865,770 0.29
2,640,000 4,515,840 1.71
1,760,000 3,831,750 2.18
70,400 87,660 1.25
- - -
17,670,400 12,301,020 0.70
No.of shares offered No. of shares bid No. of total times
13,200,000 10,994,940 0.83
2,640,000 1,150,020 0.44
1,760,000 1,362,240 0.77
70,400 20,880 0.30
- - -
17,670,400 13,528,080 0.77

Discussion on MSTC Limited IPO:

    *So who are major ppl invested in MSTC* :

    FII – Morgan stanley

    DII – GIC, BoB, LIC, New India Insurance

    NBFC – Anand Rathi

      There is nothing we can earn in OFS these days. So it is better to avoid for time being.

    RVNL IPO – From 29 March to 03 April
    Qib 50%
    Hni 15%
    Retail 35%
    Size approx 480 cr
    Price band 17-19
    50 Np discount, per share
    Lot size 780 shares.

    RVNL IPO – From 29 March to 03 April – 253,457,280 shares being offered with Retail Discount

    It is not good if the IPO subscription date need to be extended due to not good response. However I applied for small qty keeping in mind retail investor discount.

    Hi.. What is your opinion regarding this ipo as whether to subscribe for listing gain or not..??

    Very Poor response from Institutional Investors. So Let us see if LIC bails out this else this IPO will be rejected.

    @ market wizard waiting for your comment !! this is some what intresting RII crossed 100%.

    Muthooth Microfin IPO tentatively hit market on 25th March 2019. Issue size approximate 600 cr.

    Should we apply
    And I have account in zerrodha
    How to apply
    How to apply by upi

    1. Metropolis Healthcare Ltd IPO to hit market by last week of March. Issue size 1200 cr. Retail 10%,HNI 15%, QIB 75%.

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    Welcome
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    Embassy-office-parks RIETS
    Issue Size – (No. of Units) 129556000
    At Floor Price of Rs. 299/-
    Price Band 300.00-299.00
    mkt tradable lot 400
    minimum bid in offer document 800
    listing bse/nse
    retail minimum application 800 units * rs 300 = rs 2,40,000

    fwd.. CPSE ETF 4th series of 3500 crores with along with Green shoe can go up to 10,000 crores

    Anchor opens on 19th March

    Non Anchor on 20th & 22nd March

    21st March being holiday, last day would be 22nd March

    The business of the Company

    More than 80% of the Revenue comes from Trading of the materials. Let us see how this Model Works.

    They procure materials on behalf of the customers based on payment commitments made by such customers.

    The process of cash and carry can be in two modes:

    a) purchase–sale model = The volume of the transaction is reflected as the turnover of the Company. In this model, they are purchasing material on behalf of their customer and later on supplying to them upon receipt of payment.

    b) facilitator mode = The volume of business is not taken as turnover since the ownership of the goods is not vested in the Company at any point in time. In this model, they basically act as a bridge between the buyer and seller.

    This trading business done through the associate supplier model. The selection of associate suppliers for a particular material is done through an open process for a fixed tenure. The Company participates in tenders floated by the buyers with the complete back up of supply of the desired material from the associate supplier. Payment is released to the associate supplier only after receipt of the same from the buyer. All the arrangements are on a back-to-back basis with the associated supplier. In this arrangement, the company is fully dependent on the associate supplier for the fulfillment of their orders. If the associate suppliers fail to fulfill their contractual commitments, the customers may take action against the company.

    Since they offer credit facilities to the customers in both cases, the receivables may be higher than the revenue earned by the Company from their trading vertical.

    Risk

    As per DRHP, there have been instances of delayed payments and defaults in payment by some of their customers which has becomes a bad debt for the company.

    The average cost of acquisition per Equity Share by the Promoter/Selling Shareholder as on the date of this Red Herring Prospectus is ₹ 0.049.

    Thord party ASBA or UPI is liable to be rejected.

    *MSTC Limited – IPO*
    (The Govt. Of India Enterprise)

    Opens: 13th March 2019
    Closes: 15th March 2019

    Prize Band: *INR 121-128*
    Discount: Rs. 5.50 per share to retail & Employees
    Lot size 90 shares.

    Category wise issue Split:
    QIB: 75%
    HNI: 15%
    Ret: 10%

    The company has incurred a loss for half-year period ended on September 30, 2018, Fiscal 2018 and Fiscal 2016 respectively based on the Restated Financial Statements.

    The said losses are primarily due to bad debts being written off and provisioning done for other bad and doubtful advances and debts.

    The MSTC has shown a loss of 9 Cr in FY18 as compared to a profit of 133 Cr in FY17 due to the following reason.

    1. The Employees expense has gone up in FY18 due to Pay Revision.

    2. The other expenses increased by 270.52% to ₹ 877 Cr in Fiscal 2018 from ₹236 Cr in Fiscal 2017. This increase was primarily due to:

    (i) bad debts are written off worth of ₹ 459 Cr

    (ii) an allowance for other bad and doubtful advances and debts of ₹ 222 Cr in Fiscal 2018.

    Bidding and validation process under UPI

    1. Before submission of the application with the intermediary, the RII would be required to have/create a UPI ID, with a maximum length of 45 characters including the handle (Example: InvestorID@bankname).

    2. RII will fill in the bid details in the application form along with his/ her bank account linked UPI ID and submit the application with any of the intermediaries.

    3. The intermediary upon receipt of the form will upload the bid details along with UPI ID in the stock exchange bidding platform.

    How to create a UPI ID in SBI:

    Step 1: Download the SBI UPI app on your smartphone from google play store

    Step 2: After the download, verify the registered mobile number via SMS. This should be the same number registered with your respective bank

    Step 3: Once the SMS is received, the app will automatically verify the mobile number

    Step 4: To begin the registration process, enter a ‘Virtual Address’, ‘First Name’, ‘Last Name’, ‘Email’. Answer the secret question and choose the respective bank

    Step 5: Accept all terms and conditions and choose the ‘Next’ button

    Step 6: Choose a bank account, click ‘Register’. Choose a 6-digit password.

    Step 7: Set up an m-PIN by submitting debit card details key in OPT to confirm m-PIN.

    Step 8: A registration confirmation message will be sent to the respective mobile number

    This is how UPI will be phased out for applying application in IPO.

    Phase I: From January 01, 2019, the UPI mechanism for retail individual investors through intermediaries will be made effective along with the existing process and existing timeline of T+6 days. The same will continue, for a period of 3 months or floating of 5 main board public issues, whichever is later.

    Phase II: Thereafter, for applications by retail individual investors through intermediaries, the existing process of physical movement of forms from intermediaries to Self-Certified Syndicate Banks (SCSBs) for blocking of funds will be discontinued and only the UPI mechanism with existing timeline of T+6 days will continue, for a period of 3 months or floating of 5 main board public issues, whichever is later.

    Phase III: Subsequently, final reduced timeline will be made effective using the UPI mechanism.

    Once the UPI payment is fully enforced the following will be applicable:

    It has been decided that an investor making an application using any of the aforesaid channel, shall use only his / her own bank account or only his / her own bank account linked UPI ID to make an application in public issues.

    Conclusion: The UPI has not been made mandatory as yet. However, once it is made then you can apply only one application from one account.

      Sir
      One more query

      After 3rd phase
      Online asba will continue or not

        I think it will be discontinued and UPI will be made mandatory. As listing time will have to be reduced to T+3 days which is only possible through UPI.

    Dear admin sir
    Request you to clarify new ipl application bidding norms from sebi.

    Can we apply 5 application in this ipo threw 1 bank account.

    What is the upi bid process

      U can apply 1 application through 1 pan card, 1 bank account update with 1 pan. So Ans is No..