NMDC FPO price-band to be fixed on Mar 8; issue opens Mar 10

Navratna public sector unit NMDC Ltd plans to tap the capital market with its FPO, offering for sale of shares for cash at a price to be determined by the book-building process.

The issue is slated to hit the market on March 10 and close on March 12. The price-band will be fixed on March 8.

The FPO comprises a net offer to the public of 330,500,000 equity shares of face value of Re 1 each. It shall constitute up to 8.38 per cent of the post-offer paid-up equity share capital of the mining company.

"The company has decided to offer a discount of five per cent to the offer price for retail individual bidders and eligible employees," NMDC Chairman and Managing Director Rana Som told reporters here today.

The proceeds of the issue will be used to fund the mining giant's capex programme.

"The company has taken up a capex of Rs 26,500 crore over the next five years. The company plans to expand and establish its presence as an integrated producer of iron and steel through selective value-addition projects," Som said.

NMDC has signed an memorundum of understanding with the Chhattisgarh government to develop a steel plant with a capacity of 3 million tonnes per annum at Jagdalpur with an investment of Rs 15,500 crore.

"We also have plans to develop a steel plant in Karnataka," Som said. The company expects to complete its acquisition of Sponge Iron India Ltd soon, he said.

NMDC also plans to develop two pellet plants at a cost Rs 1,500 crore in Karnataka and Chhattisgarh.

"These projects will be financed through internal accruals as the company will have a cash balance of Rs 13,000 crore as on April 1, he said.

The price-band and minimum bid lots will be decided by the selling shareholders in consultation with the book-running lead managers (BRLMs), Som said.

The BRLMs to the issue are UBS Securities, Citigroup Global Markets, Edelweiss Capital, Kotak Mahindra Capital, Morgan Stanley India Co and RBS Equities India.