Nov 22, 2012, 09.45 PM | Source: PTI

Govt takes note of NMDC's Legacy acquisition

The government on Thursday took note of NMDC's acquisition of a 50 percent stake in Australia's Legacy Iron Ore for Rs 99.63 crore.

The government on Thursday took note of  NMDC 's acquisition of a 50 percent stake in Australia's Legacy Iron Ore for Rs 99.63 crore. "The Cabinet Committee on Economic Affairs (CCEA) on Thursday noted the acquisition of 50-percent equity shares by NMDC  in Legacy Iron Ore, which is a listed entity in Australian Stock Exchange at a total investment of Rs 99.63," an official statement said.

"The acquisition process has been completed and NMDC is now a majority shareholder on the board of Legacy," it added. NMDC's acquisition of Legacy is the first overseas buy of iron ore resources by a state-run firm. "This initiative will encourage further acquisition of strategic raw materials overseas by other PSUs for long-term mineral security for domestic industry," the statement said, adding that NMDC has sourced the funding from its internal accruals.

Legacy is a Perth-based exploration company with focus on iron ore, gold, manganese and base metals. Incorporated in April, 2007, Legacy was listed on the Australian stock exchange in July 2008.

Legacy has six exploration stage projects in western Australia and has 11.18 percent shareholding in Hawthorn Resources Ltd (Hawthorn), the registered owner of Mt. Bevan Iron Ore Tenements and a listed company on the ASX.

NMDC aims to raise its iron ore production capacity to 48 million tonnes per annum (mtpa) by 2014-15 from current installed capacity of 32 mtpa. The company has been actively pursuing the acquisition of overseas strategic mineral assets with the aim of meeting its own requirements and also towards raw material security for the country's steel and fertiliser industries.

Following the acquisition of Legacy, NMDC is also eyeing more acquisitions in Brazil, Mozambique, Russia, USA and South Africa.

NMDC stock price

On November 26, 2015, NMDC closed at Rs 91.50, down Rs 0.3, or 0.33 percent. The 52-week high of the share was Rs 149.80 and the 52-week low was Rs 90.10.

The company's trailing 12-month (TTM) EPS was at Rs 12.01 per share as per the quarter ended September 2015. The stock's price-to-earnings (P/E) ratio was 7.62. The latest book value of the company is Rs 81.55 per share. At current value, the price-to-book value of the company is 1.12.

Set email alert for


video of the day

Like Bank Nifty; mkt has strong support at 7700: PhillipCap

Explore Moneycontrol

Copyright © Ltd. All rights reserved. Reproduction of news articles, photos, videos or any other content in whole or in part in any form or medium without express written permission of is prohibited.