Navratna PSU NMDC Ltd announced 2:1 Bonus Issue, Here to know Target Price

NMDC Ltd, Navratna PSU metals and minerals company is scheduled to reward investors with 2 free shares on the existing 1 piece. The announcement came 16 years after its last bonus, NMDC has received a SELL rating on its stock from brokerages like Kotak Institutional Equities and Centrum.

Last month, the company increased the prices of iron ore by a whopping 18% through two hikes. This was due to capitalizing on a tight domestic market due to an extended monsoon and logistic challenges in Odisha.

NMDC's prices are at a 48% premium to export parity, much above historic premiums (30%), and at a 10% discount to import parity versus the historic average of 20%.

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NMDC's share price ended at Rs 220.70 per share, up by 1.40% on BSE with a market cap of Rs 64,678.47 crore. The stock's 52-week high and low is at Rs 286.35 apiece and Rs 171.05 apiece respectively. The return on equity is at 22.01%.

The Navratna PSU player has declared the issuance of Bonus Shares to the shareholders of the Company in the ratio of 2:1, i.e. two Bonus Equity Shares of face value Rs 1/- each fully paid up; for every 1 existing equity share of face value of Rs 1/- each fully paid up, to the eligible members of the Company as on the record date, subject to the approval of the Shareholders of the Company.

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This will be the second bonus issue by NMDC, after 16 years. The last time NMDC sanctioned bonus shares to investors was in May 2008, also in the ratio of 2:1.

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