If you are an investor in a state-owned company, you never quite know what to expect. Remember the recent cock-up with the Indian Railway Catering and Tourism Corporation (IRCTC). Its shares crashed 25% in late October following a Ministry of Railways directive to share half of its convenience fee revenue. The move was reversed within hours following a backlash from investors, and the stock recouped most of the losses. So, it's hardly a surprise that governmental caprice casts a shadow over yet another company that went public around the same time as IRCTC, in 2019.
MSTC, formerly the Metal Scrap Trading Corporation, has in recent years recast itself as an "e-commerce" company—by enabling the online sale of oil and gas, and e-auctions of spectrum, coal, and even properties related to banks' bad loans. Besides different government departments, MSTC counts private sector heavyweights Reliance Industries, Larsen & Toubro, and Bharti Airtel among its clients.
MSTC's online platform business brought in just $30 million in revenue in the year ended March 2021—a figure that could more than double in three-four years, according to a market expert who tracks the company. But the real kicker is the valuation, with MSTC's e-commerce business being potentially worth $1.6 billion by 2025—5X of the company's current market cap.
But this optimism has to unfortunately be tempered by the fact that MSTC's largest owner could stand in the way of its growth. For instance, MSTC's e-procurement revenue has tanked thanks to the Indian government directing its different departments to make their purchases through another of its ventures—the Government e-Marketplace. Can MSTC grow despite the government of India? A Question asked by the citizen of India!