NMDC board approves demerger between company, NMDC Steel: Report

NMDC shares rose over 5 per cent at ₹174 per share on BSE on Tuesday after the demerger announcement.

National Mineral Development Corporation or NMDC said on Tuesday its board of directors have given a nod to the demerger between NMDC Limited and NMDC Steel Limited, according to Live Mint. ''The Demerged Undertaking would be vested with NMDC Steel Limited pursuant to the demerger. The entire share capital of the NMDC Steel Limited held by the NMDC Limited would be cancel led and new equity shares of NMDC Steel Limited (in a manner as elucidated in the Scheme) would be issued to all the shareholders of NMDC Limited in the same proportion,'' NMDC said, according to Live Mint.

NMDC is a government-owned company and is engaged in the exploration of a wide range of minerals and NMDC Steel is a wholly-owned subsidiary of NMDC Limited. (File Photo)

NMDC said in an exchange filing that the scheme is subject to necessary statutory and regulatory approvals, including the approval of the Securities and Exchange Board of India (Sebi), stock exchanges, the Union ministry of corporate affairs as well as respective shareholders and creditors.

NMDC is a government-owned company and is engaged in the exploration of a wide range of minerals and NMDC Steel is a wholly-owned subsidiary of NMDC Limited.

NMDC shares rose over 5 per cent at ₹174 per share on BSE on Tuesday after the demerger announcement.

NMDC said earlier this month that the government plans to offload a 4 per cent stake in the company through an offer for sale (OFS). The government will get at least ₹3,700 crore from NMDC's share sale after institutional investors overwhelming subscribed to the OFS on Day 1 on July 6. It is selling more than 219.5 million shares or a 7.49 per cent stake in NMDC at a floor price of ₹165 a piece.

The government is looking to earn ₹1.75 lakh crore in the current fiscal from minority stake sales and privatisation-- ₹1 lakh crore is expected from the sale of its stakes in public sector banks and financial institutions and the remaining ₹75,000 crore would come as Central Public Sector Enterprises (CPSEs) disinvestment receipts. The government has got ₹3,994 crore from the sale of SUUTI stake in Axis Bank and around ₹3,700 crore from the share sale in NMDC.

(With agency inputs)