2:1 Bonus Shares By Navratna PSU Stock: 27th December Record Date; Prime Time To Buy?

The largest manufacturer of iron ore in India is the National Mineral Development Corporation (NMDC), a Navratna Public Sector Enterprise under the Ministry of Steel, Government of India. The largest producer of iron ore in India, NMDC was established in 1958 as a public company under the Government of India. It has its registered office in Hyderabad, Telangana, and owns and runs highly mechanised iron ore mines in Chhattisgarh and Karnataka. Additionally, it runs India's sole mechanised diamond mine near Panna, Madhya Pradesh. After the company's Board of Directors announced the record date for 2:1 bonus shares, NMDC's shares closed Wednesday's trading session 5.96% down at Rs 213.95 a share, with a market capitalisation of Rs 62.63KCr on the NSE.

NMDC Bonus Shares

"We wish to inform you that the Company has received in-principle approval under Regulation 28(1) of SEBI LODR, 2015, from BSE Limited and National Stock Exchange of India Limited vide their letters dated 16th December 2024, for issue and proposed allotment of 586,12,11,700 Equity shares of Rs 1/- each as bonus shares in the ratio of 2 (two) new equity shares for every 1 (one) existing equity share held in the Company. Further, the Company has fixed Friday, 27th December 2024, as the "Record Date" to determine the eligibility of shareholders for issuance of the said Bonus Shares. The deemed date of allotment shall be Monday, 30th December 2024, for the purpose of allotment of said Bonus Shares of the Company (ISIN No.: INE584A01023). Further, these Bonus Shares will be made available for trading on the next working date of allotment i.e. Tuesday, 31st December 2024, in accordance with SEBI circular dated 16th September, 2024," said the PSU company in a stock exchange filing.

NMDC Financials

For the second quarter ending September 30, 2024, state-owned NMDC Ltd. reported an 18.1% year-on-year (YoY) rise in net profit of Rs 1,211.6 crore. According to NMDC's regulatory filing, the company reported a net profit of Rs 1,026 crore for the corresponding quarter of the previous fiscal year. Revenue from operations for the firm increased by 22.5% to Rs 4,919 crore in Q2FY25 from Rs 4,014 crore during the same period in the previous fiscal year. In the second quarter of the current financial year, EBITDA increased 16.4% to Rs 1,385.7 crore from Rs 1,191 crore in Q2FY24. Compared to 29.7% during the same time in the prior fiscal year, the EBITDA margin was 28.2% for Q2FY25.

NMDC Share Price Target

Mandar Bhojane - Equity Research Analyst at Choice Broking said, "NMDC's stock price declined by over 6% on December 18, 2024, trading near Rs 213. This drop followed reports that the Karnataka government is planning to increase the duty on iron ore, with an estimated revenue target of Rs 10,000 crore from these duties in the current year. This news has been perceived as negative for NMDC, significantly dampening investor sentiment. From a technical perspective, the stock has formed a head-and-shoulders pattern on the weekly chart, signaling continued bearish pressure. If the price closes below the Rs 210- Rs 205 range, further downside is likely, with potential corrections to Rs 190 and Rs 180. Notably, the 100 EMA, located near Rs 194, could act as a key support level."

"A bullish reversal at this point might provide a fresh buying opportunity, while Rs 245 remains a critical resistance level for any recovery. The RSI currently stands at 44 and is trending downward, reflecting weakening momentum. Meanwhile, the Stochastic RSI indicates a negative crossover, further underscoring bearish market conditions. Both indicators point to continued selling pressure in the near term," the analyst commented.

"Short-term traders and investors are advised to hold their positions with a strict stop-loss at Rs 200. Long-term investors, on the other hand, may consider averaging their holdings near Rs 190, anticipating a rebound. The long-term targets for the stock remain at Rs 280 and Rs 300, provided market conditions stabilize and sentiment improves," Mandar Bhojane further recommended.

Disclaimer

The recommendations made above are by market analysts and are not advised by either the author, nor Greynium Information Technologies. The author, nor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.