Mumbai: Shares of MMTC Ltd and State Trading Corp of India Ltd (STC) fell as much as 16% each after a newspaper report suggested that the government was planning to shut these state-owned trading firms.
According to a report in the Times of India, the government has decided to shut down State Trading Corp of India Ltd along with Project and Equipment Corp of India Ltd. The report also said that MMTC will be revamped.
State Trading Corp reported a loss for the fourth consecutive quarter. As of fiscal year 2019, the total consolidated debt of the company stood at ₹2,180.89 crore. As of March 2019, MMTC had a consolidated debt of ₹961.49 crore.
STC hit an all-time high of ₹868 on 19 September 2007, and has since then slumped over 87%. MMTC hit an all-time high of ₹1,897.72 on 12 September 2007 and is down 99% since.
Also read: India equities open weak as investors flock to safe haven assets
"From a time when they commanded enormous influence in the Indian markets the PSUs — dogged by corruption controversies and inefficient management — have now become a drag on the system after failing to repay loans and facing bankruptcy," according to the Times of India report.
Earlier in March, Syndicate Bank initiated insolvency proceedings against STC for an amount of Rs. 625.32 crore.