NMDC Steel shares hit 5% upper circuit for third straight session

NMDC Steel shares surged for the third consecutive day on February 22, hitting the upper end of the 5 percent intra-day limit after the company's listing post its demerger.

There were only buyers for the stock at Rs 34.95 on the National Stock Exchange. The stock has now risen 15.5 percent from its listing price of Rs 30.25.

NMDC Steel, which operates as a subsidiary of parent company NMDC, made its debut on the exchanges after its demerger on February 20. The stock listed on the BSE and NSE at Rs 30.25 on February 20.

Under the demerger scheme, NMDC shareholders received one equity share of NMDC Steel for every share held.

NMDC Chairman and Managing Director Sumit Deb said in an interview to CNBC-TV18 that the company plans to commission a steel plant by April 2023 with a total capital expenditure of Rs 25,000 crore. Deb also revealed that the NMDC arm's peak debt will be around Rs 5,000 crore, while internal accruals will be at Rs 21,000 crore.

Catch up on all LIVE stock market updates here

Despite aiming for steel volumes of 1-1.5 million tonnes in FY24, Deb does not expect the company's steel plant to break even for the next two years.

Additionally, parent company NMDC is also set to buy a 10 percent stake in NMDC Steel, but the time and price for the purchase has yet to be finalized, Deb added.