Mumbai: India’s largest iron ore producer NMDC Ltd said fiscal third-quarter profit declined 40% as output fell because of rebel attacks and customers cutting contract prices.
Net income was Rs860 crore in the three months to 31 December, versus Rs1,425 crore a year earlier, according to an advertisement published in ‘The Financial Express’. Sales fell 32% to Rs1,588 crore.
“There has been about a 10% reduction in output because of disturbances in the mining areas,” said S. Thiagarajan, director of finance . “There has been a reduction in the long-term contract prices.”
Terror factor: NMDC’s mine at Dantewada, Chhattisgarh. Maoists have in the past sabotaged its pipelines carrying iron ore slurry.
Maoists have in the past sabotaged NMDC’s pipelines used to transport iron-ore slurry to customer sites.
NMDC shares surged more than threefold in the past year after the government announced a plan to sell an 8.38% stake in the firm by March.
The company is set to file a draft prospectus with the Securities and Exchange Board of India on Monday for its estimated Rs20,000 crore follow-on public offer (FPO).
“NMDC will file the draft red herring prospectus (DRHP) for the follow-on public offer tomorrow. The NMDC board cleared the DRHP for the FPO on Saturday,” a person familiar with the development said on condition of anonymity.
The government currently holds about 98.38% of the company, and the rest is already with the public. It had diluted a 1.62% stake in 1996 by allotting it to employees and qualified institutional buyers.
(‘PTI’ contributed to this story.)