NMDC, a navratna public sector undertaking engaged in the production of iron ore, is entering the capital market with a further public offering (FPO) of 33. 22 crore equity shares of Re. 1 each through an offer for sale by the Union Government. The price band has been fixed between Rs. 300 and 350. The final price will be determined through the book building process.
The issue is open from March 10 to 12. The offer represents 8.38 per cent of the outstanding equity share capital of the company with a reservation of 17.43 lakh shares for eligible employees. A discount of five per cent to the offer price, determined pursuant to the completion of book building process, will be offered to retail individual bidders and employees.
Addressing presspersons here on Tuesday, N. Srinivasan, Joint General Manager (Finance), said the company was a low cost producer of iron ore and had turned out 28.5 million tonnes of iron ore in 2008-09.
The mining operations are located at Kirandul and Bacheli in Chhattisgarh and Donimalai in Karnataka consisting of several iron ore mines.
He said the company had access to significant reserves of high grade iron ore, predominantly greater than 64 per cent of ferrous content. He said 92 per cent of the company's iron ore sales volume were made based upon long term sales contracts while the balance 8 per cent was sold on the spot market at negotiated prices.
According to N. K. Nanda, Director (Technical), the open-cast mines were fully mechanised and the company was possessing in-house capabilities for exploration. The company was a also operating a diamond mine at Panna (Madhya Pradesh), one of the largest diamond mines in Asia.
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