Two Navratna PSU companies have fixed record dates for the 1:2 stock split and the 2:1 bonus issue on December 27, which is nearing. The two PSUs are likely to trend accordingly. One belongs to the defence sector, while the other is part of the metals and minerals industry. Who are they? Mazagon Dock Shipbuilders and NMDC. Ahead of their big reward which stock to buy?
NMDC Bonus Issue:
After market hours of December 19, NMDC share price stood at Rs 214.10 apiece, near its intraday high. Its market cap is around Rs 62,744.27 crore. The stock's 52-week high and low is at Rs 286.35 apiece and Rs 179.75 apiece respectively. YTD, the stock is up by nearly 1%. While its return on equity is healthy at 22.01% as of December 19.
NMDC has fixed December 27 as the record date to determine eligible shareholders for its upcoming bonus issue in the ratio of 2:1. The allotment of bonus shares will take place on December 30. The 2:1 ratio means that NMDC will allot two free shares on the existing 1 piece to eligible shareholders.
National Mineral Development Corporation (NMDC), a Navratna Public Sector Enterprise under the Ministry of Steel, Government of India is the single largest producer of iron ore in India. It owns and operates highly mechanized iron ore mines in Chhattisgarh and Karnataka and has its registered office in Hyderabad, Telangana. NMDC is considered to be one of the low-cost producers of iron ore in the world. It also operates the only mechanized diamond mine in India at Panna, Madhya Pradesh.
Should You BUY NMDC shares? As per Trendlyne data, the consensus recommendation from 19 analysts for NMDC Ltd. is HOLD. EPS is expected to grow by 25.0% in FY25. The 1-year average target on NMDC is Rs 242.63, which signals more than 13% potential upside ahead. Also, brokerage Prabhudas Lilladher has set a Rs 253 target price on NMDC, hinting at over 18% potential upside.
Mazagon Dock Shipbuilders stock split:
Mazagon Dock shares are at Rs 5039.20 apiece on BSE, with a market cap of Rs 1,01,635.62 crore. The stock witnessed a decline on December 19, by 1.3%. However, Mazagon Dock shares have surged significantly in the past few days and even joined the Rs 1 lakh crore m-cap club. The stock's 52-week high and low is at Rs 5,859.95 apiece and Rs 1,797.10 apiece respectively.
Notably, Mazagon Dock is a multi-bagger of 2024, with gains of more than 120% on BSE so far.
This defence PSU behemoth is going to split its shares in the ratio of 1:2. This means the sub-division off of existing 1 (One) Equity Share of the face value of Rs.10/- (Rupees Ten Only) each fully paid up into 2 (Two) Equity Shares of the face value of Rs. 5/- (Rupees Five Only) each fully paid up. The record date to determine the eligibility of shareholders for the stock split is fixed on Friday 27 December, 2024.
It was incorporated as a Private Limited Company in 1934. After its takeover by the Government in 1960, Mazagon Dock grew rapidly to become the premier war-shipbuilding yard in India, producing warships for the Navy and offshore structures for the Bombay High.
Should you buy Mazagon Dock shares? As per Trendlyne data, the consensus recommendation from 3 analysts for Mazagon Dock Shipbuilders Ltd. is HOLD. EPS is expected to grow by 39.9% in FY25. However, the average 1-year target price is at Rs 3642 apiece, signalling a potential drop of 28% ahead. Notably, in a stock split, Mazagon Dock shares will eventually correct and become more cheaper.
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