Mining major NMDC will buy back more than 13.12 crore equity shares at ₹105 each. The offer price is almost 12% premium to Tuesday’s closing price of ₹94 on the BSE.
The 52-week high of NMDC share was ₹139.50 (January 23), while the 52-week low was ₹62 (March 13).
NMDC said the board had approved the buy-back of not more than 13,12,43,809 shares (of face value of ₹1 each), representing 4.29% of the fully paid-up equity shares, at ₹105 eachThe aggregate should not exceed ₹1378,05,99,945. NMDC set November 23 as record date.
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For the September quarter, the PSU’s consolidated net profit rose more than 10% to ₹772.5 crore. Total income stood at ₹2,318.7 crore (₹2,369.4 crore).
It would be the third buy-back by the public sector mining major since 2016. During the previous such exercise it undertook in February 2019, NMDC bought back more than 10.20 crore shares at ₹98 each. The aggregate consideration was not more than ₹1,000 crore. In September 2016, the buyback was for up to 80.08 crore shares at ₹94 each for an aggregate amount not exceeding ₹7527.76 crore.
As on November 6, the Centre, through the President of India, holds 69.65% in NMDC. The remaining 30.35% is held by public and institutional investors, including 4.25% by individuals. The company said it will be making a public announcement setting out the process, timelines and other requisite details pertaining to the proposed buyback in due course in accordance with the Buyback Regulations.
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Donimalai mine
In the notes accompanying the results, the company said on August 28 a high-level meeting related to the mining lease of Donimalai iron ore mine was held in Bengaluru between Karnataka Chief Minister and Union Minister of Coal and Mines, in the presence of CMD of NMDC Ltd and senior officials of the Centre and the State government. At the meeting it was decided to extend the mining lease of Donimalai mine with a temporary premium of 22.5% of the average sale value published by IBM. NMDC is waiting for suitable orders in this respect from the State/Central Government.
The issue traces its root to Karnataka Government, while renewing the lease of Donimalai iron ore mine in 2018, imposing a new condition asking for a premium of 80% on the average sale value.