NMDC Steel Ltd (NSL), the newly listed demerged entity of NMDC Limited has hit the upper circuit for two days in a row. The company made a debut on the BSE at ₹ 20.25 apiece yesterday and settled 4.96 percent higher at ₹ 31.75 apiece. Its share price increased to ₹ 33.30 apiece on Tuesday’s early deals and hit the upper circuit again.
As per the listing norms for companies that get listed because of demergers, the scrip will be in the trade-for-trade segment for 10 trading days. This means that there will not be any intraday trading.
In July 2022, NMDC Limited’s board approved a scheme of arrangement which included the demerger of its Nagarnar Iron & Steel Plant (NISP) at Nagarnar, Chhattisgarh. This plant would be demerged from NMDC to NMDC Steel (NSL), a wholly-owned subsidiary of NMDC.
“NMDC’s shareholders (as on 25 October 2022) will get an additional share of NMDC Steel Limited, which possesses the steel plant (1:1 ratio) i.e. NMDC transfers the steel plant at book value, which is around ₹190 bn ( ₹65/share), and debt of around ₹17 bn. We expect the new shares (NMDC Steel) to list in December 2022 at around ₹36/share,” said brokerage firm Edelweiss in a note last year.
Currently, the government holds a 60.79 percent stake in NSL. The company is up for privatization and the government is looking to sell 50.79 percent of its shareholding along with management control. It had invited preliminary bids or expressions of interest (EOI) for the strategic sale on December 1, 2022, and the last date for receiving the bids was January 27.
The remaining 10 percent stake of the government would be offered to NMDC after the strategic buyer for the 50.79 percent stake is selected.
The Department of Investment and Public Asset Management (DIPAM) said that as per current estimates, the targeted date for commissioning of the steel manufacturing plant NSL is March 31. It is expected to have a production capacity of 3 million tonnes per annum (MTPA).
Written by Simran Bafna
