What led OMDC to defer stock split again?

Orissa Minerals Development Company Ltd (OMDC) was forced to defer its planned stock split for a second time after the government sought more information, a company official told DNA Money.

“The decision has been held up due to procedural reasons. The government has asked for some clarifications from the company on certain issues. The approval would be given by the board only after the ministry is satisfied with the reply,” said the official.
A decision on the split had been deferred, the company informed exchanges after its board meeting on November 18, without elaborating.

This was the second deferment in a month — the first, at its board meet held on November 9, was attributed to the “absence of government nominee director.”

The official refused to speculate on when the final go-ahead might come.

The deferment has left the street peeved, more so because OMDC is expected to go for a bonus issue after the split.
“The thinking is definitely there for a bonus issue, but nothing has been concretised,” the official said.

The stock split is expected to increase the liquidity of the costliest stock in the country, attracting widespread retail and institutional interest leading to fair valuation. It would also impact valuation of shares of Rashtriya Ispat Nigam (RINL), which plans to come up with its initial public offering.     RINL acquired 51% stake in Eastern Investment Ltd, the holding company of OMDC and Bisra Stone Lime Co Ltd (BSLC), last December.

The OMDC shares, of face value `10 each, closed at a whopping 36,689.95 apiece on the Bombay Stock Exchange on Thursday, making them the costliest scrip around. This is despite the fact that OMDC has no operations at present due to the closure of all its iron ore mines.

The high price is mainly because of the low floating stock, which had pushed the scrip up from a 52-week low of `39,401 on August 19 to a record high of `92,200 on November 15.

For the record, the stock was hammered down as much as 8% following the announcement of the first deferment, which came after market hours on November 9.