State-owned trading firm MMTC on Tuesday proposed to split the company's shares in the ratio of 10:1, implying that shareholders would get ten equity shares of a face value Re 1 each for every Rs 10-per-share currently held.
This is being seen as a precursor to a disinvestment of the trading firm where the government still holds 99.33 per cent though it is listed.
The government will have to raise public shareholding to 10 per cent and later to 25 per cent through a follow-on public offer.
An MMTC spokesperson refused to comment.
A source in the government, who did not wish to be identified, however said a stock split in MMTC was necessary before the government decides to divest equity through an FPO.
The company also announced a bonanza for its shareholders in the form of a dividend of 90 per cent and bonus shares at the ration of 1:1.
Before the split, the number of shares held by the public stands at 3.34 lakh.