NMDC climbs 3% ahead of share sale

Tags: News
Shares of NMDC clim­bed three per cent on Tuesday after a few brokerages gave a ‘buy’ recommendation on the scrip ahead of its follow-on public offer (offer for sale) scheduled for Wednesday.

The scrip has fallen 18 per cent from its September peak (Rs 194.35) and the FPO base price of Rs 147 still stood at a discount of 7.72 per cent per cent over Tuesday’s close of Rs 159.30.

Earlier, the FPO of Hindustan Copper (HCL) was priced at 41 per cent discount to its market price. Experts believe the HCL scrip was probably overvalued pre-FPO due low public float. Total public holding in NMDC stood at 10 per cent at the end of the September quarter compared with 0.41 per cent in the case of HCL.

“A strong balance sheet, presence in sellers’ market, low cost of production, high-grade mines and long mine life make NMDC an attractive bet in our view. Valuing the stock at 5.5 times FY2014E EV/Ebitda, we recommend investors to subscribe to the issue at the upper price band of Rs 150,” said Bhavesh Chauhan and Vinay Rachh of Angel Broking.

The scrip opened positive and saw brisk buying before touching an intra-day high of Rs 164.19, (6 per cent above its previous close level). Some profit booking was seen in the afternoon session. However, the scrip managed to stay high and gain 2.94 per cent to eventually close at Rs 159.30.

Chirag Shah and Faisal Memon of Barclays upgraded the scrip to overweight from underweight with a 12-month target of Rs 173.

Post new comment

E-mail ID will not be published
CAPTCHA
This question is for testing whether you are a human visitor and to prevent automated spam submissions.

EDITORIAL OF THE DAY

  • For those who are left to survive a war-torn world, let there be peace

    The hunger games have begun, and they have started reaping our children. There is no way around it.

FC NEWSLETTER

Stay informed on our latest news!

INTERVIEWS

GV Nageswara Rao

MD & CEO, IDBI Federal Life

Timothy Moe

Goldman Sachs

Chander Mohan Sethi

CMD, Reckitt Benckiser India

COLUMNIST

Urs Schöttli

Shifting sands in the Far East

As was to be expected, Japanese prime minister Shinzo Abe ...

Zehra Naqvi

When humanity died, bestiality prevailed

The terrorist attack that killed 132 children in Peshawar has ...

Bubbles Sabharwal

Why self-esteem must be your best friend forever

Two negatives do make a positive! Imagine no doubts, no ...

INTERVIEWS

William D. Green

Chairman & CEO, Accenture