NMDC Share Price: NMDC Limited, formerly National Mineral Development Corporation, is a government-backed Naratna PSU stock with the President of India holding its majority stake of 60.79%. This PSU is going to deliver bonus shares in a 2:1 ratio, which is much-awaited since the reward comes after 16 years of gap. NMDC share price witnessed a surge of nearly 1% on Friday, December 20. However, despite the latest uptrend, NMDC is poised to end its weekly performance in red. Not just that, the stock has also given zero returns on a monthly and six-monthly basis. Does this give an opportunity for buy-on-dips?
NMDC Share Price:
At the time of writing, NMDC stock is trading at Rs 215.35 apiece, up by 0.6% on BSE with a market cap of Rs 63,110.60 crore. The BSE 200-listed stock is currently near its day's high of Rs 216.05 apiece. Meanwhile, the stock's 52-week high and low is at Rs 286.35 apiece and Rs 179.75 apiece respectively.
The price-to-equity ratio of NMDC is lower than its sector at 10.17x, while the return on equity is at 22.01%. However, NMDC's latest weekly performance is indicating a drop of 8%. While its month-on-month performance is down by 1.1% as of now. Further, its six-monthly performance has been deeply bearish with a downside of 21.2%. Hence, zero returns in past six months.
YTD, although, the stock is up by 7%. The stock was merely near Rs 202 at the start of the current year.
It will be keenly watched how bonus shares record date and allotment moments stir sentiment in NMDC stock.
NMDC Bonus Issue:
The Navratna PSU player has declared the issuance of Bonus Shares to the shareholders of the Company in the ratio of 2:1, i.e. 2 (two) Bonus Equity Shares of face value ₹1/- each fully paid up; for every 1 existing equity share of face value of ₹1/- each fully paid up, to the eligible members of the Company as on the record date, subject to the approval of the Shareholders of the Company.
For the upcoming bonus, the company declared December 27 as the record date, while the allotment date is fixed on December 30th.
Notably, this will be the second bonus issue by NMDC, however, the first in 16 years. The last time NMDC sanctioned bonus shares to investors was in May 2008, also in the ratio of 2:1.
NMDC Share Recommendation:
On December 20th, NMDC stock is recommended to HOLD by broker JM Financial for a target price of Rs 250. The brokerage took note of NMDC's two times price hike in October 2024. NMDC announced a price hike twice in fines by INR400/t each in 3Q.
According to the brokerage, overall Indian steel markets witnessed a divergent price trend with long product prices moving up by ~INR1.5k/t while flat product prices declined by ~INR2k/t. Global steel-making raw materials witnessed mixed trends - spot coking coal marginally down by USD9/t QoQ to ~USD202/t, iron ore marginally up QoQ at ~USD95/t. Spreads of Indian steel players are likely to witness mixed trends for flats and longs players given expectation of lower coking coal consumption cost (~-USD20-25/t) but divergent trends in realizations.
About NMDC:
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.
Click it and Unblock the Notifications
Sign in with Google