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NMDC to separately list steel biz; last day to buy stock to qualify for demerged shares

stock was in focus on Tuesday as it was the last day to buy shares of the company in order to be eligible to receive shares of the demerged steel entity.

The government, earlier this month, had given its nod to demerge the steel business into a separate listed entity named NDMC Steel, from the state-owned iron-ore miner.

The company fixed October 28 as the record date for the same. Any investor having the delivery of shares in their demat account as of the given date would be considered eligible for the stake in the new entity.

The eligible investors will get one share of NDMC Steel of the face value of Rs 10 each, for every share of NDMC of the face value of Re 1 each.

Any investor, buying shares after Tuesday, October 25, will not be eligible for the shares of NDMC Steel and would need to buy them from the open market. Stock markets will observe a holiday on Wednesday, October 26.

The order from the Ministry of Corporate Affairs (MCA), issued on October 6, was received by NMDC on October 11. Assets worth Rs 18,650 crore and liabilities worth Rs 1,602 crore will be demerged to NMDC Steel.

In October 2020, the Cabinet Committee on Economic Affairs (CCEA) chaired by Prime Minister Narendra Modi had given its in-principle approval to the demerger of the steel plant from NMDC, and the strategic disinvestment of the steel unit.

Founded in 1958, NMDC is a publicly-run enterprise, under the ownership of the Ministry of Steel, Government of India, and the country’s largest iron ore producer.

Since its inception, it has been involved in the exploration of a wide range of minerals, including copper, rock phosphate, limestone, magnesite, diamond, tungsten and beach sands, amongst others.

Shares of NMDC dropped more than 2% on Tuesday to Rs 128.15 before marking some recovery. The scrip settled at Rs 130.95 in the previous session.

(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of Economic Times)

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