After back-to-back upper circuit since listing, NMDC Steel share price falls today: Buy?
- NMDC Steel shares listed on Monday after the demerger of NMDC's steel business
Shares of NMDC Steel Ltd fell more than 3% to ₹33 apiece on the BSE in Thursday's early trading session, after hitting back-to-back upper circuit for three straight days since its listing on Monday, February 20, 2023. The company's market valuation stands at over ₹9,905 crore on the BSE.
“NMDC Steel is witnessing surge in stock prices since the demerger of it’s steel business after which it is expected that the company would be able to reduce its capital intensity now and improve the dividend payout ratio. On technical setup, the stock is showing strength on momentum indicators with an immediate target of ₹44 levels in high volatility,” said Ravi Singh, Vice-President and Head of Research at Share India.
NMDC Steel is a newly formed entity post its demerger from mining giant NMDC Limited. Currently, the government holds a 60.79% stake in NSL, which is the steel manufacturing facility of India's largest iron ore producer NMDC located in Nagarnar, Chhattisgarh.
The company is up for privatisation with the government looking to sell 50.79% of its shareholding, along with management control. DIPAM Secretary Tuhin Kanta Pandey said on January 27 that the government has received multiple preliminary bids for the privatisation of NMDC Steel and the transaction will now move to the second stag.
In July last year, NMDC said its board approved scheme of arrangement between the company, NMDC Steel, and their respective creditors and shareholders, which entailed inter-alia demerger of Nagarnar Iron & Steel Plant (NISP). Under the Scheme, the NISP plant at Nagarnar, Chhattisgarh would be demerged from NMDC to NMDC Steel (NSL),a wholly owned subsidiary of NMDC.
The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.
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