NMDC follow-on offer to open on March 10

Navratna company NMDC Ltd’s follow-on public offer (FPO) for 33.05 crore shares will open on March 10 and close on March 12.

Rana Som, chairman and managing director, NMDC said the price band for the FPO will be decided on March 8 or 9.
The company has a free float of just 1.62% and the rest 98.38% is with the government.

The government is looking to offload 8.38% stake in the market through the FPO.

Finance minister Pranab Mukherjee said in the budget that the government had a target of raising Rs 25,000 crore through disinvestment next fiscal and had identified four companies for disinvestment. NMDC is a big-ticket option.

Som said the company is looking to acquire four new mines — two in Jharkhand and one each in Karnataka and Chhattisgarh — next fiscal.

It aims to produce 50 million tonne of iron ore by 2014-15. “Currently, we are producing 30 million tonne per year and are adding approximately 50-60 million tonne of reserves every year.

Currently, the company has total iron ore reserves of 1.4 billion tonne,” said Som. Besides iron ore, the company is looking to acquire global assets in coking coal, rock phosphate and potash. “NMDC is a minerals company and not an iron ore company, so we have asked them to focus on other commodities also. We are completely dependent on imports of rock phosphate and potash and therefore, NMDC is looking to acquire those mines abroad,” steel secretary Atul Chaturvedi said.

Som said the company has a total capacity expansion outlay of Rs 26,500 crore, of which Rs 15,500 crore is earmarked for a steel plant at Jagdalpur, Chhattisgarh and Rs 1,500 crore for two pellet plants in Chhattisgarh and Karnataka, respectively.