The Union Minister of State for Textiles (I/C), Shri Santosh Kumar Gangwar, in his chamber in the Ministry of Textiles on Thursday launched the first e-auction yarn of National Textile Corporation (NTC) as part of its effort for greater transparency, efficiency and better price. Initially, three mills of NTC, namely, Vijamohini Mill, Kerala Lakshmi Mill and Rajnagar mill have been selected for selling of its produce through e-auction. NSEiT, a National Stock Exchange subsidiary that has been conducting e-auctions for various PSUs, has been roped in to conduct the e-auction of yarn.
Anu Garg, Joint Secretary, Textiles; P C Vaish, Chairman and Managing Director, NTC Ltd; N. Muralidaran, Managing Director & CEO, NSEiT and other senior officials were present on the occasion.
The decision to adopt e-auctions has been taken in order to give maximum opportunity to dealers for lifting of NTC stock and thereby reduce inventory and improve cash flow. The transparent electronic bidding process is also expected to result in better price discovery of the yarn stock.
Currently, yarn is sold through dealers, registered mill-wise with NTC as per due procedure. Prices are fixed every Wednesday and the yarn is sold to dealers on the YPC rates for the entire week (unless there is a mid-week change).
The stock at the fixed / agreed price is then made available to the registered dealers / agents, who lift the material; payment is made as per NTC rules. At present, 4-6 dealers are registered with each mill. If the material is not sold, the same remains unsold and stock piles up.
The e-auction mechanism, launched today, provides an opportunity to circumvent this problem, leading to higher stock up-take, reduced inventory and improved cash flow.
The e-auction route has been made open for all registered dealers of NTC. Each dealer has been provided a unique ID and password, and trained by way of mock e-auctions and practice sessions.
The e-auction will take place every week on Thursday from 03:30 PM to 04:00 PM while the base prices for the e auction will be fixed on Wednesday. The sale shall be completed and material will be allotted as per the highest bid and quantity, as the case may be. There may be more than one winner for one count of yarn
In future, e-auction shall be extended to the open market as well (after registering the dealers).
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