NMDC has scope for value-unlocking for investors with demerger plan

Steel plant demerger, improved return ratios for mining business, high dividend yield key positives

NMDC reported a weak set of numbers for the June quarter (Q1) on Thursday evening, but news of the demerger of its steel plant boosted investor sentiment. NMDC’s share price jumped over 13 per cent intraday, before closing 12 per cent up on Friday. The demerger, analysts say, should lead to value-unlocking for investors.

NMDC, the country’s largest iron ore producer, has set up a 3-million tonne per annum (MTPA) steel plant in Chhattisgarh. Though NMDC’s investment in the steel plant was aimed at driving growth and earnings, with the plant adding value to its captive iron ore, the Street