After demerger, shares of NMDC Steel listed on the bourses on February 20 at Rs 30.25 apiece on the NSE and BSE, in-line with analyst expectations. Meanwhile, share price of its parent NMDC Limited traded lower by 1 percent at Rs 120 apiece.
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NMDC in its vision 2025 had specified that its role would be that of a developer for steel plants and that it would invite investors to commission and operate the plants at a suitable time.
Accordingly, the iron ore producer had proposed a scheme to add more value to its stakeholders by demerging the steel business into a separate company and subsequently inviting investors.
As per the scheme of demerger, shareholders of NMDC got one equity share of NMDC Steel for every share held. Assets of Rs 18,650 crore and liabilities of Rs 1,602 crore has also been demerged to NMDC Steel.
The demerger is expected to help the parent's balance sheet as any additional capex now on the steel plant will be through the balance sheet of the steel plant without recourse to the mining business, noted Motilal Oswal Financial Services.
While the board of NMDC had approved the demerger in July 2021, the Ministry of Steel had approved the demerger of NMDC Steel in March 2022.
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