The Finance Ministry has given its approval for the closure of MMTC (Metals and Minerals Trading Corporation of India) due to the lack of investor interest, as per a senior government official.
MMTC, established in 1963 under the Ministry of Commerce and Industry, has seen a significant decline in its quarterly net profit, falling 99 percent to Rs 10.67 crore in September 2023 from Rs 1,117.19 crore a year earlier.
“The commerce ministry had sought the finance ministry’s opinion on MMTC. The finance ministry suggested that the PSU should be closed as there is no investor interest,” stated the official.
The closure proposal will now move to a panel consisting of Finance Minister Nirmala Sitharaman, Road Transport and Highways Minister Nitin Gadkari, and Commerce Minister Piyush Goyal for a final decision. The government has already approved the closure of around 21 loss-making PSUs, though the process faces challenges due to potential job losses.
Once the Union Cabinet approves MMTC’s closure, the coordination will be overseen by the Finance Ministry’s Department of Public Enterprises, responsible for managing the PSU closure process.
MMTC’s quarterly financials show a sharp decline, with net sales falling 87 percent to Rs 1.81 crore in the same period. Despite the challenges, MMTC’s shares have gained about 72 percent in the past year.
The government currently holds an 89.93 percent stake in MMTC, falling short of the minimum 25 percent public shareholding norm. Plans for strategic disinvestment have been discussed, but no decision has been taken yet.
In August 2023, the Securities and Exchange Board of India cancelled MMTC’s registration as a stockbroker due to its involvement in an illegal ‘paired contract’ related to the National Spot Exchange.
