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MSTC Ltd
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Ladies and gentlemen, good day, and welcome to the MSTC Limited Q1 FY '23 Earnings Conference Call hosted by Equirus Securities Private Limited. [Operator Instructions] Please note that this conference is being recorded.
I now hand the conference over to Mr. Depesh Kashyap from Equirus Securities Private Limited. Thank you, and over to you, sir.
Yes. Thank you, [indiscernible]. Hello, everyone. On behalf of Equirus Securities, I welcome you all to 1Q FY '23 Earnings Conference Call of MSTC Limited. From the management, we have with us today Mr. Surinder Kumar Gupta, Chairman and Managing Director; Mr. Subrata Sarkar, Director of Finance; and Mr. Ajay Kumar Rai, Company Secretary. We'll begin the call with the opening remarks from the management, and then we can open the line for Q&A.
I now hand over the call to Mr. Surinder Kumar. Over to you, sir.
Yes. Good afternoon, everybody. Before we come to the financials, I would like to share a very good news with all the participant investors here. MSTC has successfully concluded the 5G spectrum auction for Department of Telecom. So this has been an event which has gone very smoothly and our honorable Minister as well as Secretary, both have been very appreciative of MSTC's role in the whole auction process.
The complete auction spread to 40 rounds and it went on smoothly without any problems. So that's a good achievement for MSTC. And they have kept faith in the capability of MSTC. And we are sure that we'll be able to -- we have the capacity to conduct any such critical event for Government of India.
Regarding the financials, our DoF will tell in more detail, but we have kept our growth trajectory. As compared to the Q1 of last financial year, total income has increased from INR 68.32 crores to INR 93.85 crores. And profit before tax has zoomed from INR 47.17 crore to INR 66.11 crores. And profit after tax has increased from INR 21.20 to INR 43.84 crores. So that is a good growth from quarter-to-quarter.
Basically, if we make a comparison from Q4 to Q1, that is not a correct comparison, because here we had some extraordinary income in the form of dividend from our subsidiary company, which is now 10 bps for 1 quarter.
And as we always keep in mind that Q4 quarter of any financial year is always the best quarter and we get business of almost 2 quarters in last 1 quarter. So from that front also, our earnings have been quite good.
If we start off our main vertical, that is the e-commerce vertical, so there, our revenues in operations has increased from INR 64.96 crores to INR 83.36 crores. So that is a good jump from Q1 to Q1. And if we compare from Q4, it is slightly down from INR 90.97 crores to INR 83.36 crores. But that is understandable as I explained that Q4 is always the best quarter for the financial year.
So with this growth trajectory, we are hoping to achieve very good results in the current financial year.
Apart from the spectrum auction, there are many other good projects MSTC is doing. We have entered number of agreements with large number of principals in South India. For Bihar, we have been selling the auctioned vehicles by excise department and we have been able to sell around 4,000 vehicles in 2, 3 months. And we are sure that we'll be speeding up that process in line with the Bihar government requirements.
In Karnataka -- in Chennai, we have entered an agreement with the dumper trucks for sale of their assets and for e-procurement requirements also. So we are entering the new areas, new frontiers, and new kind of clientele. We are not limiting ourselves to the scrap chain, we are entering into new kind of things, new kind of business.
So that is the brief opening remarks, before I hand over to our Director of Finance to give you further update on the financials.
Good afternoon to everybody. So before I start, if you look at it, it's a very remarkable quarter. And for the concern of our investors, then the provisioning will come to an end. So if you see the quarter, you can see that, that is the quarter and there we have no data on that particular line item, that means no provisioning for stand-alone financial statements.
And now I will come to the quarter 1 financial statements. So if you compare quarter 1 to quarter 1 of previous year, so the total revenue, although has declined from INR 171.2551 lakhs to INR 93.8590 crores, that is by 45%. Marketing is down by 90%. That is INR 112.0751 crores to INR 10.1926 crores. E-commerce grew by INR 59.1130 crores to INR 83.5838 crores. Others are, of course, a minimal amount. And EBITDA pre-provisioning has gone up by 42.70% from INR 47.4832 crores to INR 67.7573 crores.
PBT has gone up from INR 37.17 crore to INR 66.11 crores. And PAT has gone up from INR 21.20 crores to INR 43.84 crores. Cash profit from INR 29.97 crores to INR 45.39 crores.
And if you go by that segmental analysis, so you can see that the E-auction/E-sale revenue has gone up by 39%. And procurement, of course, there is this revenue. And of course, other income has gone up also.
And if I go to the group financial as a whole, total revenue is a little bit lesser from INR 268.68 crore to INR 194.81 crores. And of course, major contributor is the marketing, where the revenues have come down from INR 112.07 crores to INR 10.19 crores. And e-commerce, of course grown up from INR 59.11 crores to INR 83.58 crores. And scrap recovery and allied jobs, which is basically the segment of our 100% subsidiary company, from INR 97.43 crores to INR 100.96 crores.
EBITDA has also gone up from INR 68.55 crores to INR 86.85 crores. And PBT has gone up from INR 53.8 crores to INR 80.53 crores. And PAT has gone up from INR 33.55 crores to INR 54.29 crores. And basically, these all details are already clear, so the result on our side. I hand over to you.
[Operator Instructions] The first question comes from the line of Vikas Kasturi from Focus Capital.
Congratulations on a fantastic quarter and wish you all the best for this financial year, too. Sir, I had a couple of questions. My first question is, could you please provide a status on the FSNL disinvestment?
My second question is, could you please provide some information on how many vehicles have been scrapped in this quarter?
So as far as the FSNL disinvestment is concerned, so DIPAM has taken that again, and you must have observed that EOIs were invited, so EOI that is in that particular field. So as and when this finalization will be there, it will be, of course, in a public domain. So that is our status. It is -- EOI status is there. So afterwards, the EOI and everything will be -- whatever is there, that will be taken care of by the DIPAM. It is being handled by -- the process is being handled by the DIPAM only. So as and when that final outcome will be there, we will always update you. So it is in the EOI stage.
Sure, sir. And vehicle scrapping, sir, number of vehicles?
Yes. So our CMD will take the number 2.
Yes. As far as the vehicles are concerned, we have got -- up to June, we have got total 1,459 vehicles. 1,459, so that's 1,460 vehicles. That is what we have got in first quarter. That is against the -- I don't have the exact quarter figures for last financial year, but if we take complete financial year '21-'22, there we got around a little than 4,000 vehicles in the complete financial year. So that is around 1,000 vehicles per quarter. So in that comparison, we have got around 1,459, so that's around 50% growth of the vehicles that we have got compared to the last year.
A follow-up question on that, sir. So last year, the government had said that all government vehicles would have to be scrapped by a certain date. I forgot the date now. So has that been implemented in force? And are you seeing a good number of government vehicles coming for scrapping?
For the time being that has been extended to October.
Okay. But are you seeing any good number of inquiries, sir?
Yes. We are getting good number of inquiries. And we are going to launch a portal for this trading of such end-of-life vehicles also, which will be exclusively for such kind of vehicles, where buyer and seller both will be online.
And just one small request, sir. So in your presentation, if you could provide more details about the nature of the business. So for example, when it comes to auctions, the number of vehicles that you scrapped and whether they were government vehicles or commercial vehicles or private vehicles. And likewise, when it comes to your e-auction business, if you could provide some color in terms of how many auctions were conducted and so on. That would be very helpful.
Okay. We will try to -- I mean, we are noting your concerns. So we'll try to see what breakup we can give you in the next conference call.
Next question comes from the line of Keshav Garg from CCIPL.
Sir, just wanted to understand that we did around INR 88 crores e-commerce revenue last quarter, which was the highest ever. So now with the fall in steel prices, since around half of this division's revenue comes from steel scrap sales, prices of which also follow steel prices, which are now down, so do you think that we can hold on to this INR 88 crore quarterly revenue in e-commerce division going forward?
You see the figures we gave you -- I gave you the figures for Q1 to Q1 also and Q4 to Q1 also. So as we say, I mean, Q4 of last year, that was around INR 83.36 crores total revenue from operations in e-commerce. So that is basically compared to total -- sorry, I'm giving you the total e-commerce. If I talk about e-commerce, last year it was INR 80 crores last quarter, and this year INR 72.3 crores, right? So that is the kind of e-commerce income.
So easily, as you rightly said, there is around 20% drop in the prices of steel as well as scrap. Still, we have been able to keep very robust performance. So that really has not reduced our income by that much percentage. So that means we are getting the additional business. And we are hoping that we'll be able to maintain the growth trajectory. Of course, had that 20% price increase been there, so we could have surpassed that INR 80 crores figure for the last Q4 also. So all these factors taken together, our Q1 figures are quite handsome, that is what we believe.
Okay, sir. And this subsidiary company, does it have any synergy with our scrap business? I mean, the scrap that we are auctioning, does that subsidiary buy from us? Or is there no relation whatsoever and both companies are totally different?
You are talking about our 100% subsidiary, Ferro Scrap Nigam Limited?
Yes.
Basically, it is in the scrap recovery and allied jobs. It does not buy or sell scrap. It is a service company. It does scrap recovery and allied jobs for the steel company, okay? So while it's very [indiscernible], it does not buy or sell scrap. And hence, the question of buying from MSTC does not arise at all.
Okay. Understood. So basically, what I'm trying to understand that post the disinvestment of the subsidiaries, there will be no impact whatsoever.
No, no, no. Let me get very clear, for your understanding, sir. We are selling the scrap through our e-auction. So it's an open e-auction and it has nothing to do with our subsidiary per se. And this subsidiary disinvestment has no bearing per se on our scrap e-auction disposal.
If you see, basically, as far as the business is concerned, we both are having quite distinct business and one is not dependent upon the other. It's only -- if we see our related party transactions, that's very meager. So that is the EBIT of scrap we spend for our, let's say, FSNL, which may be their old equipment or something. So that is a very, very, very meager amount. So as such, the disinvestment of FSNL per se will not have any effect on the financials of e-commerce income of our country, MSTC.
Yes, sir. Understood. Sir, I just wanted lastly to understand that Coal India has announced that it will start its own portal for scrap sales. And sir, other big PSUs might also follow soon, because this is ongoing -- scrap generation is an ongoing thing. So in that case then, where do we -- I mean, what will be our role if this goes in-house?
No, let me correct you. What Coal India has announced is that they will be selling their coal, selling some part of the coal of Coal India, right? So for that, they have got their portal from NIC. But that portal has not started.
But what has happened is that Coal India has announced a new policy for sale of coal. For that they requested MSTC only to make a platform for them. So we are in the advanced stage of development of that portal. In fact, that portal, we have done our homework and Coal India is testing that portal. So there we are expecting that there will not be any impact and NIC will be getting 3 long years to make the portal as per that. So there we don't expect any significant revenue loss.
And further, another thing I would like to highlight is, as far as coal is concerned, we say quarter-to-quarter the earnings are around very less. Total earning will be around, from the coal sector -- this is for the quarter-to-quarter financial year end, so it'll be INR 12 crores to INR 13 crores.
That is there. But let me supplement, CMD sir. So volumes are not going down that way. And second, that we told Coal India, as CMD Sir has explained, Coal India is still in a very latent stage and they are still utilizing our portal. And for their new policy also, our portal will be utilized for sale of coal. So in the near future, we do not see any effect to our current use. So we will review it in the next quarter also what is happening and what is the development.
Revenue from Coal India is very insignificant if you take about the total of our e-commerce earnings. So that may be less than even 10%. So that is not really -- even if it goes out, that will not really affect us, but we don't expect it to go off very soon.
Next question comes from the line of Srinivas Reddy, an individual investor.
I have two questions, sir. Regarding this other income, consolidated other income, the consolidated balance sheet, it has been abnormally increased, I mean, from the earlier by around INR 9 crores, I think. So can you throw some light on that number? Because most of the profits now in the last quarter, I mean, on consolidated basis have come from the other income increase, sir.
And regarding the provisions of earlier years, you were telling us that from this year, the provision requirement will not be there on the stand chart and other cases. So this is my second question.
And the third one, final one, what is that you are trying to do for the B2C business? I mean the loans, bank loans, all those property auctions and other things, sir? So as part of that, any sustainable business plan you have come up for the B2C e-commerce business? So these are my queries.
Thank you, Reddy sir. You have been always a very guiding factor for us as a brother. So first let me tell, the major chunk of other income has come from like one is some kind of provision within that. So in case of MSTC, it is around INR 4.25 crores that we have the old provisions that were realized through [indiscernible] process. That is a major chunk. And other portions are, of course, a little bit of rise in the interest rate and et cetera. That's why we have realized from that. But major is like written there. That is the one question that you asked.
And then regarding provisions, this is the first quarter, as I earlier announced also, that we didn't have any provisions. And of course, in the consolidated accounts, we have little bit of provision for the income for our subsidiary. So it will remain in that particular range only. So major provisions are not expected in the coming future as we can stay and stand right now, because most probably all the marketing provisions have been taken care of.
Regarding the third business prospect, I will hand over the mic to CMD sir.
Regarding your query about this B2C, I will agree that we don't have that good a presence in the B2C segment. As far as the property is concerned, yes, we are in B2C. We have an agreement with -- as we have already conveyed that for the sale of assets of the public sector bank, we have a centralized agreement with them. We are selling the properties under Sarfaesi Act for the banks. And there, we have sold quite a good number of properties, and the sale of properties is increasing quarter-to-quarter year-to-year. And banks are getting good dividend out of that.
Regarding the properties, we have sold the properties for Hyderabad city. And there are similar number of properties for Air India, and other organizations are being regularly sold on our portal. And we are getting a number of other queries from a lot of other state governments and central agencies where we hope to get additional business for the property sale. So in the coming years, that is also going to give us good amount of revenue from the properties sales.
So that is what I can update. Regarding the bank loans and all that, I'll admit that we are not into that area of operations.
One clarification, sir, regarding the debt. So when can we expect our company to operate as a zero-debt company, because now marketing is reduced -- working capital requirement of marketing sector of the business. So our company is more into e-commerce now. So when can we expect it to having 0 debt, sir? After this FSNL sale, it is possible with that additional amount that we are getting?
Mr. Reddy, I'm getting back to your question right now. So if you think -- basically, if you look at our annual balance sheet, so the debt right now basically is only the disputed debt that MSTC had denied and disputed and protested and made a [indiscernible] of that of Standard Chartered Bank, basically. So virtually, we are right now a 0-debt company. Virtually, we can call. We've a very meager amount of term loan of SBI, which will be taken care of. But virtually, if we can, for all practical purposes, this is a 0-debt company, except that is the entry that we are in, for which we have protested, denied, and disputed, and the case is sub judice, so we are unable to comment on that. Otherwise, it is a 0-debt company.
Next question comes from the line of Dixit Doshi from Whitestone Financial Advisors Private Limited.
Congratulations on good numbers. Sir, my first question regarding this JV with Mahindra. So you mentioned about the number of vehicles scrapped. My question is, once they scrap the vehicle, the scrap generated was auctioned by us or they themselves dispose it off?
We do auction the scrap normally. MSTC auctions that scarp. For this player, they have a separate portal, but as far as scrap is concerned, it is primarily sold on MSTC platform.
Okay. Okay. And my second question is regarding this e-commerce segment. So you rightly mentioned that even though the steel scrap prices have come down, our revenue has not come down so much. So on a, let's say, medium-term basis, 2-, 3-year perspective, at what rate our e-commerce business can grow?
It's very difficult to comment at this juncture. The scenario is changing so rapidly, and it is a mixed bag transition that we give in the e-commerce. Suppose scrap sale is there -- e-sale is there, we are trying to give mixed bag, as our CMD has already said, we are going to enter in a lot of areas. So revenue is a mixed type and what will be the scenario in the next year, it is very difficult to say. But as of now, the growth of the company is primarily dependent on e-commerce, and it will be e-commerce based growth only.
Okay. And I will supplement to what Director of Finance says. If you see the last few quarters, you will see very good growth, and we are hoping to maintain the growth trajectory. Of course, there are other factors which will not be in our control.
Another thing that I'd like to supplement is, there was a time in e-commerce also where the majority of our income was from scrap sales. Now we are basically -- there also, the revenue from the e-commerce scrap sale is going down and percentage revenue -- so I'm not saying in absolute terms, but the percentage contribution to our revenues are basically coming down, and we are basically diversifying our brackets, our business segments.
So there, if there is a downfall in one particular segment, so we hope to insulate ourselves from the total results and also make good [indiscernible] in different other sectors. So there, I think we are slightly better off from all these market fluctuations. Of course, we are living in this world and we will be unaffected, I cannot say that. But our effect will not be that large for that one particular segment going down. That is what I can assure the investor community.
Sir, how much percentage of revenue from scrap this quarter?
Less than 50%. Slightly less than 50%.
And how much it would have been in Q4?
Similar level. Similar level. It doesn't -- I mean, that diversification does not vary significantly from one quarter to quarter. But if you see from, let's say, a couple of years back, then it could be 75% to 80%. Now it is less than 50%. So that is basically, you have look, there is some change.
Okay. And my last question is, now that we have scaled down and almost our marketing business has been over. So is there any scope for rationalization in the employee cost? Like, there will be some employees who were dedicatedly for the marketing business. So is there any scope of employee cost reduction?
You see, we have decreased the marketing, we have increased the e-commerce and we have opened offices in almost all major states. And we are working with a very thin manpower. And in marketing, only couple of people are engaged now. So there is hardly any scope. So as we went down on marketing business, the people were taken out and they were re-employed in the e-commerce. So you cannot expect a basically downturn or any reduction in the staffing after the discontinuation or decrease of marketing business. So that factor has already been taken care of.
And last question from my side. The sale of FSNL is basically government is doing for disinvestment purpose. So is it fair to assume that whatever proceeds will come from the sale of FSNL, majority of that will be used to pay the shareholders in terms of say dividend or...
Yes, it is quite premature. The sale is yet to take place and every quarter we are meeting you. So let it take a shape, then we will get back to you on this particular issue.
Next question comes from the line of Abhishek Kale, an individual investor.
Sir, my question, are there any time frames that we have received from the Government of India regarding the divestment of FSNL because it's been -- I mean in the last quarter is when we spoke about that the EOIs were submitted and that part was taken care of. So when is the likely date of announcements? Could you please comment on that?
Yes. This is being done basically on behalf of Government of India, DIPAM, Department of Investment and Public Asset Management. And basically, it depends upon a lot of factors, the response, the approval, et cetera, et cetera. And it is very difficult to comment upon any kind of fixed timeframe per se when it will happen. But as and when it comes or some developments are there, we will let you know.
Sir, if I may have a follow-up on this. Do we have any idea of the time lines or right now you won't be able to comment as to when it is likely to happen, because you might have received some fillers from the government as to how and when this is likely to take place, the divestment.
[indiscernible] to tell, because it is a process being handled by DIPAM only, okay? So I can tell that approvals, et cetera, and all the procedural aspects are there. So we will time to time let you people know.
Okay, sir. May I ask another question, please?
Yes, please.
Sir, the joint venture with Mahindra, right, how much -- if I'm not mistaken, it has contributed very little to our top line and the bottom line. So I mean, could you please specify the exact numbers in terms of percentages? And what are the plans that we have along with Mahindra in order to have this business start contributing a bit more? Or is it not in our hands, it's solely dependent on how the government enforces those directives of scrapping old vehicles?
First of all, let me tell you, if you look at our consolidated financial statement, okay, if you see that, so that figure is already there, the share of profit from the JV. It is, of course, very insignificant figure that you have pointed out. But you know that you have to appreciate a couple of things. When a project takes off, it takes significant time to generate a fair amount of profit, right, number one.
Number two, the policy has yet to take a shape and take its full form. So when these couple of things happen, then only the profit will start coming and it will contribute to our, of course, in the group income. And of course, this will contribute to our bottom line. So that's the point. So it is all disclosed and it will take a little bit of time, because until and unless this policy takes its full form and it is in the full year, high level of profit is a little bit late. That it will take some time.
I'll supplement it here that after the issue of policy by government, because this is a state subject basically, so the states are in -- I mean, most of the states are in the advanced stages of [indiscernible] of their own policies on the line as the policy issued by [indiscernible]. As and when that policy is announced, [indiscernible] and we say certain incentives and disincentives. So those will come on ground. Then only [indiscernible] will be able to make the -- basically, our capacities. Presently, we are working below par capacity.
I mean, whatever we have the installed capacity, we are not getting competitive enough vehicles. So as the policy gets traction in the state government, then the vehicles will increase, and our, basically, the top line for the company on MMRPL company will increase. And similarly, where it was in loss, so it may start making good profit. So we are hoping that now very soon -- Assam has recently announced the policy. Other governments are in advanced stage. So we are hoping that in current year, number of states will announce their policy and their implementation will start and this business will get good traction.
Okay. So sir, if I am correctly summarizing it, for both the questions that I've asked, the FSNL and the MSTC, we are kind of, or rather we are mostly dependent on the government policies to take effect, and that is when we will see movements in these 2 things, right?
To some extent, that's right. We are making efforts from our side also. We are engaging in dialogue with the state government. And apart from that, we are increasing our recycling facilities also in the anticipation of issue of policy. So we are quite proactive on that front.
Next question comes from the line of Harshit Jain from RAH Investments and Advisory.
I would like to know in Q1 what is the kind of revenues we did from scrap business? Like last year we did INR 6,000-odd crores. What is the revenue this time?
6,000-odd crores, that most probably you are talking about the volumes and et cetera. Basically, it was just now pointed out by our CMD sir, like basically if you take, around 40% to 50% is coming out from our scrap business. So that's the ratio.
No, I'm talking in terms of number that how much sales volume we did on the scrap side in Q1?
Around -- if you can take it, it is around INR 3,000 crores -- around INR 2,500.
INR 2,500 crores?
Around, approx.
Okay. And one more thing. In your investor presentation, you have mentioned that you have signed ESL Steel, Arcelor Mittal. So are we enjoying the same kind of margins which we were used to or...
Yes. That is for the iron ore. For Arcelor Mittal, we have done it for the iron ore. And we are having same kind of margins that other iron ore sellers we are looking at.
So it would be in a range of 2.15 to 2.55?
No, no, it keeps on varying. It keeps on varying. That depends upon business for business. So we cannot give the -- basically, it's customer to customer. It's not proper for us to divulge that kind of commercial information.
But can you give me a ballpark figure? Is it around 2% on iron ore sales?
No, please excuse us, we cannot give that definite figure. So that may affect our business with the customers.
Okay. Okay, sure. Sure. And one more thing [indiscernible] development operation. And some of the auctions get repeated. So can you guys -- just a small suggestion from my end that if our auction repeats itself, can you mention that it is re-auction, because people get confused that you have got a new auction, but that is the same old auction.
Okay. First, let me go back to your old question. I will tell you that we have a different business model for different kind of commodities. Somewhere we charge in the range of percentage, somewhere we charge like on the event charges and all that. So there cannot be any [indiscernible] that we charge. And then the prices vary from commodity to commodity, right? So there, I mean, it's very difficult or it's not rather possible to give a figure on that how much percentage we charge. This is one thing. Then second, you said that whenever the auction is repeated, so that's a nice suggestion. We'll look into this possibility and will try to incorporate it, yes. That's a good suggestion you have given.
Yes, sure, because a lot of auction repeated. And sometimes, as an investor or as a person...
I know that is -- I can feel that. If the auction is getting repeated, we can tell the people who are interested that it's an old auction which could not be sold.
Yes. And one more suggestion would be like, can you guys also give us like that how much percentage of auctions are successful via your portal?
Pardon, how much percentage?
How much percentage of the auctions are getting successful?
Okay. Okay. We will think -- of course, we have got very good solutions. So of course, if feasible, let us see how could we do these.
Yes, because if there is more transparency and more fairness from your side, then obviously, investor interest would entrust and it will be good for the company in the long-term.
And my last question would be regarding Standard Chartered case. So I just want to know that our properties are attached since past 15 years. So if you guys pay INR 143 odd crores, so will our properties be returned back to us? Or will it be taken by Standard Chartered Bank along the money?
Let me tell you very clearly that this matter is sub judice and we have denied, disputed, and done all the denials in the [indiscernible] forum. So question of paying does not arise at all. And as and when outcome of the cases are there, we will let you know, sir. And we are fighting it at different [indiscernible].
No, I just want to know that, do we need to pay INR 143 odd crores, or do we need to pay 18% interest for the past 15 years as well?
From where you got 18% interest?
Like if income tax penalty is...
Can I have that document of proof, some kind of...
No, no, I'm just asking you that...
Anyway, to be very precise on this particular issue, this is sub judice. It is really the outcome of the court that will decide whether we have to pay or we do not have to pay. Right now, we have denied and disputed. And for us, from our side, it is not payable.
So our maximum outflow will be INR 143 odd crores, right?
Again, I'm telling you, right, it is sub judice, it is a matter of the court. So I am restraining myself from commenting on this, because we are saying it is not payable, a single penny is not payable on this account, and we have denied and disputed the whole amount.
The next question comes from the line of Pradeep [ Juluri ], an individual investor.
So my question is regarding the cash equivalent which the company has, right. So it's almost around about 50% of the market cap right now. So is the management thinking of doing a share buyback right now? And if not, basically what's the cash utilization going to go towards going forward?
[indiscernible] I mean, right now we have not published our balance sheet. It is not in the public domain for this quarter. So let us discuss about this in the month of September, sir.
Yes. So from basically the March quarter, obviously, we have the balance sheet, right? So it's more than INR 800-odd crores that...
Sir, we will, of course, come to your place and we'll reply your question in the month of September, when our balance sheet will be there and when fresh assessment of the cash and cash equivalent will be there. Of course, we will reply what we are doing with our cash equivalents.
The next question comes from the line of Keshav Garg from CCIPL.
Sir, I wanted to understand that since we have competition from GeM portal, and you had mentioned in one call previously that ITI and one more company is also basically doing the same kind of business that we are doing, auction or making software for auction. So basically, what is the competitive scenario like? Are you seeing more participation by these competitors in, let's say, auction of bank properties or coal mines or telecom [indiscernible] auction? Are these parties also competing with us over there?
You see, it's not that these entities, except GeM. GeM has come a couple of years back. Most of the entities, whosoever are the players in e-commerce, we are always in competition with them. And we are basically with the trust the people have put in our capabilities. The government sector, as well as now you are seeing that private sector people like Arcelor Mittal, Reliance, Airtel, [indiscernible] Tower, all these people are giving business to MSTC despite all the competition.
You see, in the competitive environment also, we have survived and MSTC has grown, which is one thing, and we have to continue our growth trajectory and provide the robust services.
And what we say is we pay you the best value. Whatever scrap or any product the people are offering us, the government agency or a private agency, because we offer them the best price. If somebody is selling iron on our portal vis-a-vis our competitor's portal, the price they get is worthy, basically. That they get the best price, that's why they come to us. So we operate in competitive markets. That is one thing.
Second, some of the projects like mines auctions, that is given to us by Government of India. So that is assured kind of business as of now, because there the MSCT, like this mines auction, there are some of the businesses which are basically given to us on nomination basis, there is no competition. For other and majority of items, there is competition, but we are surviving because of our good services. And we have a large outreach where our bidders community is very large. So that is why we are able to give very good price. So we don't have such fierce competition, and we hope to survive and grow in the competition. And that is how the world is all about today.
Sure, sir. And sir, also, would you like to give us some idea that where are we in terms of penetration, that if we take scrap only, then we are doing mostly steel scrap. So how many large size PSUs are there which till now we are not catering to, or we are in talks, or there are chances that in future we might start offering our services to them. Similarly, in the private sector. Sir, similarly, let's say, for our medical waste, or for many other scrap items, sir, it's ongoing generation of scrap, so can we be some kind of an aggregator?
You see, I only partially agree with your statement. It's not only ferrous scrap. On MSTC platform, we sell each and everything. I mean it may be human hair, it may be non-ferrous, it may be aircraft, it may be aluminum, it may be batteries, so it's all kinds of scrap, whether it is ferrous, whether it is non-ferrous, whether it is the commodity. So all kinds of things are being sold on our platform.
And another thing I'd like to say is that we are continuously engaging. All our branch offices are there spread across the country. They are continuously engaging with the stakeholders, the government sector, the public sector there, the major private sector there. And we are increasing our outreach and we are entering new and new [indiscernible] with various principles. So that is why we have grown all these years by adding more number of sellers on our portal. And we hope to maintain that growth trajectory and have more number of important customers.
Sir, sometime back you had mentioned that we have got into some kind of agreement with MIDC or basically industrial development corporations of states to dispose off their scraps. So any progress on that front? And how many states have we signed such kind of agreements with? And what is the scope for future?
We have done it with Daman. So with that experience, we are engaging with other state governments, but still we have not finalized any other agreement. And we are basically entrusting upon the government also to help us in that regard. So as and when something major happens, we'll definitely inform you.
Thank you. As there are no further questions, we have reached the end of question-and-answer session. I would now like to hand the conference over to the management for closing comments.
So thank you, everybody, and all of our investor community who have spared their time to participate and listened to us very patiently. From the management side, we can assure you, our investor community, that your investment is in safe hands and we are striving hard. Our smart team of 300 people is working hard for the growth of the company, so that our investors get a good return for their investment. So that is what we believe that will happen, and that is happening also. Our IPO price was -- I mean, we are more than double the IPO price, and we are hoping to gain further traction. Thank you.
Thank you all. That's all from our side.
Thank you. On behalf of Equirus Securities Private Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.