Expect NMDC's FPO price around Rs 300: Tulsian

Excerpts from Bazaar on CNBC-TV18 Watch the full show » NMDC BSE | NSE 10/02/12 Are Mutual Funds betting on NMDC?

NMDC closed its follow-on offer on March 12, which was subscribed just 1.25 times. SP Tulsian of Sptulsian.com expects the issue price close to about Rs 300 (the price band was at Rs 300-350 per share).

Here is a verbatim transcript of the exclusive interview with SP Tulsian on CNBC-TV18. Also watch the accompanying video.

Let us take the total shareholding distribution pattern for NMDC. At present there is only quarter percent of shares in the market, I am talking with the retail investors, that is about 1 crore share because out of 1.5% float as of today in the market, 1.25% is held by the insurance companies. So there is only quarter percent float with the public, of about 1 crore shares held by about 40,000 people.

If you see the allotment, the response having received by the FPO, in fact about 1 lakh application for about 2 crore shares have come in the retail category and about 8,000-9,000 applications have come in the HNI category for about 70 lakh shares. So post this FPO shares listing, there will be float of about 3.5-4 crore. In fact that will discover the price. I do not think that insurance companies and all those who will effectively be holding about maybe 8.75% or maybe 8.5% post this IPO will really be able to control the share price because 1.5% float in the market with 1.5 lakh shareholders holding about 4 crore shares can make the price to discover at an efficient price which in my view is likely to be close to about Rs 300.