Shares of NMDC colored the portfolios of investors red as the share opened almost 30% below yesterday's close...


Shares of NMDC colored the portfolios of investors red as the share opened almost 30% below yesterday's close! 

National Mineral Development Corporation (NMDC) is India's single largest producer of iron ore. It was incorporated in 1958 as a PSU which was involved in the exploration of several minerals such as copper, rock phosphate, limestone, magnesite, tungsten beach sands, etc. 

It has two iron ore mines in Chhattisgarh and two in Karnataka. Moreover, it is also the only organized producer of diamonds in India with its mine in Madhya Pradesh. 

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The main reason for the crash of the share was its demerger. Earlier this month, the government approved the demerger of NMDC's steel business into a different company called NMDC Steel. 

NMDC Steel will be separately listed on the bourses soon after receiving the relevant approvals. 

The record date for the demerger was set for 28th October. Pursuant to this, all investors holding shares of NMDC on 25th October would be eligible to receive one share of NMDC Steel of FV Rs 10 against every share of NMDC of FV Rs 1. Any shareholder after 25th October would be ineligible to receive such shares and would have to purchase the same from the open market. 

Analysts have noted that the demerger of the entity's businesses was long-awaited and a positive for the stock in the long run since it would be unlocking the potential of NMDC's Rs 21,000 crore investment in its steel plant. 

Against a close of Rs 130.75 per share on 25th October, the share opened at Rs 92.25 per share today, down 29.5%, which was also its 52-week low!! 

However, that was the lowest it hit during the day. The stock breached the Rs 100 mark shortly thereafter and was above it for the rest of the day while reaching a high of Rs 109.05 per share. At a close of Rs 104.30 per share, the stock was 20.23% below yesterday's close. 

On the other hand, when compared with today's opening/low, the share surged 13.06% in a single day. 

Article by Aman Agarwal.

This news piece is brought to you in association with jobaaj.com

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