Govt offers discount, fixes NMDC issue price at Rs 145-150
The fundamentals of the iron ore maker is also stronger compared to HCL and above all, it is a debt-free company, they said. In addition, NMDC is sitting on a cash pile of over Rs 20,000 crore and commands around 41 per cent share in the domestic iron ore market.
The government had offered 41 per cent discount for selling its 5.58 per cent stake in HCL. However, despite that, it failed to attract the attention of the retail investors and had to be rescued at the last moment by state-own financial firms, including LIC.
In the last fiscal, NMDC had reported a net profit of Rs 7,265.39 crore and net sales of Rs 11,260.53 crore.
However, in the June-September quarter, its net profit was down nearly 15 per cent at Rs 1,678.62 crore largely due to fall in sales and lower production.
At present, the government holds 90 per cent stake in NMDC. As of March 31, 2012, the state-owned iron ore miner had a paid-up equity capital of Rs 396.47 crore.
For the share sale, the company had appointed five merchant bankers -- Citigroup Global Markets, Goldman Sachs (India) Securities, Enam Securities, DSP Merrill Lynch and ICICI Securities -- and ALMT Legal, Advocates & Solicitors as legal advisor.
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