The closing price of one MMTC Ltd share was an eye-popping Rs49,179.65 on Wednesday. That gives the public sector trading firm a market valuation of more than $60 billion (Rs2.36 trillion). MMTC is now more valuable than all other Indian firms, except Reliance Industries Ltd and ONGC Ltd.
The vertiginous rise in the MMTC share baffles us. It traded at a yearly low of Rs1,831 not too long ago. There is no great news coming from the company, other than a plan to partner in a proposed commodity exchange.
The most plausible explanation is the low floating stock available for trading: 99.33% of MMTC stock is owned by the government. Just 5,456 shares were owned by the public at last count. National Mineral Development Corp. Ltd, too, has seen its market value soar because of low tradable stock. Taken together, the two are worth $100 billion. The total value of equity owned by the government —$327 billion— seems far less impressive, doesn’t it?