NMDC: A long-term play on steel cycle; may see decline in FY23 revenues

NMDC's formal demerger of the steel plant may be followed by an initial public offering, or the government could look for a stake sale

Govt to sell up to 7.5% in NMDC via OFS on Tuesday, may get Rs 3,621 cr

NMDC stock trades at a significant discount to its international peers, with a current price-to-equity (PE) of 6-7x and an enterprise value/Ebitda of 3.7x

Devangshu Datta
Words like “China unlock” are beginning to attract speculators. One of the key reasons and areas for the same could be China’s real estate, which contributes almost a third of its gross domestic product.

If there’s a recovery in real estate activity, steel, other industrial metals and cement would be some of the sectors where demand would obviously grow. This could make a positive difference to iron ore prices and, in turn, could mean a rebound in the valuations of NMDC since it is a major ore producer.

In that case, NMDC may be able to increase its production of iron ore and maintain margins. Having divested its steel plant will also strengthen its balance sheet and lead to improved

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First Published: Dec 26 2022 | 8:30 PM IST

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