Shares of a Miniratna company pared 5.17 percent on Monday to reach an intraday low of ₹ 213.85 apiece on the National Stock Exchange (NSE) after the company said that it will be stopping production at its Mangalore plant.
KIOCL informed the exchanges that the company has stopped pellet production at its manufacturing unit in Mangalore with effect from August 05, 2023 due to the non availability of iron ore fines. It said that it will provide information once it resumes production.
The Bengaluru-headquartered company resumed its operations at its Mangalore plant on November 24, 2022, after the government withdrew export duty on iron ore pellets and specified steel products including pig iron from November 19, 2022. It had temporary;y closed down due to lack of demand with effect from August 23, 2022.
KIOCL is the flagship company under the Ministry of Steel, Government of India, with Miniratna status. It is an export-oriented unit with expertise in iron ore mining, filtration technology, and the production of high-quality pellets.
With a market capitalization of ₹ 13,705 crores, KIOCL is a small-cap company. It has a negative return on equity of 4.71 percent but an ideal debt-to-equity ratio of 0.27. Its shares were trading at a price-to-earnings ratio (P/E) of 922.77, which is significantly higher than the industry P/E of 14.30, indicating that the stock might be overvalued as compared to its peers.
The company is promoted by the government, which holds a 99.03 percent stake in it, followed by retail investors with 0.84 percent and domestic institutional investors with 0.13 percent.
Written by Simran Bafna
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