NMDC Steel shares jump 5% after stock market debut. Full details

NMDC Steel, the demerged steel business of NMDC, got listed at stock exchanges on Monday after being spun off in October last year. The stock, which debuted at Rs 30.25 on BSE, soon got locked at 5 per cent upper circuit limit at Rs 31.75. On NSE, the scrip last traded at Rs 31.75.

The government, which held 60.79 per cent stake in NMDC Steel as per a December 2022 filing, is looking for a strategic disinvestment in the company. It last month received in-principle approval from stock bourses for the listing of NMDC Steel.

In December, NMDC told stock exchanges that the government would sell shares, representing 50.793 per cent of the equity share capital of NMDC Steel, along with transfer of management control.

The government also invited  Expression of Interest (EOI) from the bidders. A media report in January suggested that Tata Steel, Jindal Steel and Power, JSW Steel, Adani Group and Vedanta Group were likely to bid for the government’s majority stake in NMDC Steel. A latest media report suggested that ArcelorMittal was also in the race buy the steel plant of mining major.

Shares of NMDC, on the other hand, fell 1.5 per cent to Rs 119.30. A cash outgo for 10 per cent stake in NMDC Steel is a bit negative, Phillip Capital said last week.

The demerger of the steel business will reduce capital intensity and improve NMDC dividend payout ratio, Sharekhan said in a recent note. “Moreover, valuation of 3.2 times its FY2025E EV/Ebitda and 0.8 times its FY25E P/BV is attractive and the stock offers a high dividend yield of 8-9 per cent,” the brokerage said on NMDC.

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