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Dec 13, 2012

NMDC to Enter Sensex, Analysts Expect up to 20% Appreciation in Stock

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NMDC

India's single largest iron ore producer and exporter, presently producing about 30 million tons of iron ore from 3 fully mechanized mines viz., Bailadila Deposit-14/11C, Bailadila Deposit-5, 10/11A (Chhattisgarh State) and Donimalai Iron Ore Mines (Karnataka State) which are awarded ISO 9001-2000 certification.

CMP 

BSE 157.15
NSE 156.90
52-week high 206.35
Target 170


The stock is expected to move up in the coming days following the succesful completion of the 10% stake sale by government on December 12. The offer was oversubscribed by 1.7 times. Active participation by foreign institutions was also a highlight. Previous two stake sales by the government, that of ONGC and Hindustan Copper, had to be rescued by LIC, largely due to the lack of foreign institutional participation.

The issue was marketed at a discount. Following the Offer for Sale (OFS), the company's free float will rise to 20 percent and it will have the largest market capitalisation in the Indian metals and mining sector.

Analysts also expect the stock to be entered into the Sensex and S&P CNX Nifty. They expect around 18-20 percent appreciation in the stock in the near term.