MSTC shares abuzz over meeting with Ramesh Damani; watch out for the NPA portal after subsidiary FSNL’s divestment

Shares of government-owned MSTC, or Metal Scrap Trade Corporation ended 5.7% higher on December 5, as it informed about a scheduled meeting with veteran market investor Ramesh Damani on December 9, next week.

The company has a market capitalisation of Rs 5,400 crore and the shares are higher by 16% so far this year, and up 19% in last one month. Aside of meeting Ramesh Damani, MSTC is also host an interaction with Modifi Investment on December 16, it said in an exchange notification.

MSTC recently was in news after the Cabinet approved the strategic divestment of its 100% subsidiary Ferro Scrap Nigam Limited (FSNL) to Japan’s Konoike Transport for Rs 320 crore. The share transfer is expected to be closed within 60 business days from the date of signing of SPA, which will mean a deal closure by the mid of January 2025. FSNL was incorporated in 1979 to provide steel mill services and the company specialises in the recovery and processing of scrap from slag and refuge generated during iron and steel making in different steel plants.

MSTC also manages the e-bidding portal for spectrum allocation, coal and mineral block auctions by the Centre and various states. It has developed an Exim platform that is used by ONGC and the Oil Marketing Companies, and a Deep portal, used by Discoms. It has also bagged the contract for the upcoming FM radio wavelength allocation. Looking ahead, the company is now thinking for operating infrastructure as a service, for sectors such as recycling, mining and e-commerce, which it says will be set up next fiscal. “we’re still working on the various revenue models and services that we can offer,” MSTC’s Bhanu Kumar said during the earnings call.

For the September quarter, MSTC saw 10-12% of total revenue come from private sector for scrap orders.

MSTC also has plans to set up a listing portal for NPAs of co-operative as well as private banks, aside of one for bad assets of PSU lenders. “..we are now going to offer to all the private banks, the rural banks and the cooperatives and all, and we have already approached many of them. And this is not going to be exclusively used by these banks. They will have other service providers also,” said MSTC’s Bhanu Kumar. The management believes the potential for this service is large since there is no systemic way for disclosing NPAs. As part of the bad loans portal, all the properties that have been declared as NPA and available for sales will be put up. “…somebody can actually look at those properties, have a 360-degree view of that, location search. And there are some access given to the bank officials for doing some transactions, putting up notifications, releasing advertisements and so on and so forth,” MSTC said.