NMDC drops as buyback price disappoints

NMDC lost 0.65% to Rs 91.05 at 10:42 IST on BSE as the buyback price of Rs 94 per share was close to the ruling market price.

The company announced the buyback price after market hours yesterday, 7 June 2016.

Meanwhile, the S&P BSE Sensex was up 12.31 points or 0.05% at 27,021.98.

On BSE, so far 1.63 lakh shares were traded in the counter as against average daily volume of 2.72 lakh shares in the past two weeks. The stock hit a high of Rs 92.50 and a low of Rs 91 so far during the day. The stock had hit a 52-week high of Rs 122.60 on 9 June 2015. The stock had hit a 52-week low of Rs 75.20 on 12 February 2016.

The stock had risen in the run up to the announcement of the details of the share buyback. The stock had risen 6.01% in three trading sessions to settle at Rs 91.65 yesterday, 7 June 2016, from its close of Rs 86.45 on 2 June 2016.

NMDC has announced buyback of 80.08 crore equity shares, representing 20.2% of the total number of equity shares in the paid-up share capital of the company at Rs 94 per share for an aggregate consideration not exceeding Rs 7527.75 crore. The buyback will be through the tender offer route. The Government of India (GoI) who is the promoter of the company intends to participate in the proposed buyback. GoI currently holds 80% stake in NMDC (as per the shareholding pattern as on 31 March 2016).

NMDC's net profit fell 59% to Rs 552.93 crore on 45.9% decline in net sales to Rs 1529.94 crore in Q4 March 2016 over Q4 March 2015.

NMDC is India's largest iron ore producer, presently producing about 30 million tonnes of iron ore from 3 fully mechanized mines.

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