NMDC gets LoI for Bailadila iron ore mine in Chhattisgarh

The Mineral Resource Department, Government of Chhattisgarh has issued Letter of Intent (LOI) for Bailadila Iron Ore Mine, Deposit-4, South Bastar, Dantewada District, in favour of NMDC-CMDC.

NMDC-CMDC is a joint venture company (JCV) wherein NMDC hold 51% stake and Chhattisgarh Mineral Development Corporation (CMDC) holds the remaining 49% stake.

The LoI issued to the JVC is for iron ore mining over 646.596 hectares in Dantewada Forest Division, Chhattisgarh.

Bailadila Iron Ore Deposit-4 is located north of Deposit-5 on the western flank of the Bailadila range of hills, lying at a distance of about l35 kms towards south-west of Jagdalpur. It is a big and homogeneous iron ore deposit having onsite reserve of approximately 107 MT with an average grade of Fe of 65.39%.

Ministry of Mines, Government of India on 30 September 2019 has granted its prior approval for reservation of Bailadila Iron Ore Deposit-4 (Total Area 646.596 hectares). in favour of NMDC-CMDC for the purpose of prospecting and mining of iron ore.

Shares of NMDC slipped 3.22% to end at Rs 169.65 on the BSE today, after the Government of India launched an offer for sale (OFS) to sell upto 21.95 crore shares (representing 7.49% stake) of the company. The Government of India held 68.29% stake in NMDC as of 31 March 2021.

The floor price for the OFS is Rs 165 per equity share, at a 5.88% discount to NMDC's closing price of Rs 175.30 on the BSE on Monday, 5 July 2021.

The OFS opened on Tuesday (6 July 2021) for non-retail investors, while both retail as well as non-retail investors will be able to subscribe on Thursday (7 July 2021). A total of 10% of the offer size is reserved for retail investors.

As on 15:30 IST, the OFS received subscription for 22,55,13,374 shares. It was subscribed 213.75% on the base non-retail offer size of 10,55,01,810 shares and 114.15% on the total non-retail offer size (base size + green shoe) of 19,75,52,139 shares.

NMDC is India's single largest iron ore producer, presently producing about 35 million tonnes of iron ore from 3 fully mechanized mines, two located in Chhattisgarh and one in Karnataka. As on 31 March 2021, the Government of India held 68.29% stake in the company.

On a consolidated basis, NMDC's net profit surged 717.15% to Rs 2,835.54 crore on 114.83% jump in revenue from operations to Rs 6,847.57 crore in Q4 March 2021 over Q4 March 2020.

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