NMDC, India’s largest iron ore producer and a Navratna Public Sector Enterprise under the Ministry of Steel, announced on November 5, 2024, that its board of directors will consider issuing bonus shares for the first time in 16 years. The decision is set to be made during the board meeting scheduled for November 11, 2024. Alongside the potential bonus issue, the board will also review and approve the company’s financial results for the quarter ending September 30, 2024.
This potential bonus issue, if approved, would mark the first since May 2008, when NMDC declared a 2:1 bonus share distribution. It holds significant importance for shareholders, as they have not seen a bonus share allocation in over a decade.
NMDC’s stock closed at ₹234.70 on the BSE, reflecting a 3.6% rise for the day, while on the NSE, it closed at ₹234.98, up 3.8%. Over the past year, NMDC has posted impressive returns, with its share price increasing by more than 46%. However, in the last six months, the stock has faced a 13% decline.
The company’s performance in the first quarter of FY25 has been solid, providing a strong foundation for investor confidence. NMDC reported a 19% year-on-year increase in net profit, reaching ₹1,969 crore. Its revenue from operations remained stable at ₹5,414 crore, while earnings before interest, taxes, depreciation, and amortization (EBITDA) rose to ₹2,725 crore, up from ₹2,276 crore the previous year. The EBITDA margin also improved significantly, increasing from 42% to 51% in the June 2024 quarter.
With a production capacity of 450.22 lakh tonnes (LT) in FY24, NMDC continues to play a dominant role in meeting both domestic and international demand, further strengthening its financial performance.
Given its strong performance and the potential for the bonus issue, which could attract additional retail interest, the upcoming board decision is crucial. If approved, the bonus issue would benefit both long-term shareholders and new investors looking to tap into NMDC’s growth potential.
Disclaimer: This information is for informational purposes only and does not constitute financial advice. Please conduct your research or consult a financial advisor before making any investment decisions.
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