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OMDC plans stock split, bonus issue

Saturday, 17 September 2011 - 8:00am IST | Place: Kolkata | Agency: DNA
The stock of the state-owned company, which is quoting at a preposterous Rs47,475 a share due to low liquidity, will be split within a year, followed by a bonus issue.

The wait could soon be over for investors keen to buy a stake in Orissa Minerals Development Co (OMDC), which has six mining leases at Barbil in Orissa, with reserves of about 206 million tonne of iron ore and 44 million tonne of manganese ore.

The stock of the state-owned company, which is quoting at a preposterous Rs47,475 a share due to low liquidity, will be split within a year, followed by a bonus issue.

The twin moves will greatly increase liquidity in the stock and help attract retail and institutional interest, leading to higher valuation, the managements of OMDC and Rashtriya Ispat Nigam (RINL), its ultimate holding company, told shareholders on Friday.

The improved valuation of OMDC will also reflect in the share price of Vizag-based RINL, which plans to come up with an initial public offering by November 2012, RINL chairman A P Choudhury said.

RINL had in December acquired a 51% stake in Eastern Investment Ltd (EIL), the holding company of OMDC and Bisra Stone Lime Co Ltd (BSLC), a limestone mining company. This made RINL the holding company of EIL and its subsidiaries OMDC and BSLC.

Retail investors would also get a chance to take exposure to EIL when its shares are available for trading on the BSE in the next 15-20 days, albeit for a limited period as RINL plans to get it merged with itself soon after its IPO.




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