NMDC falls after LIC sells 2% stake for the second time

NMDC shares were slightly down in early trade after Life Insurance Corporation (LIC) trimmed its stake in the state-run company by 2 percent between March 14, 2023, to June 20, 2023.

At 9:37 am, NMDC was quoting at Rs 106 per share, down 0.2 percent from the previous day’s close on the National Stock Exchange (NSE).

After the latest sale, LIC’s holding in the company stands at 9.6 percent from 11.6 percent. The move gains significance as this is the second time LIC has divested a 2 percent stake in the iron ore company. A significant institutional investor, LIC had previously disclosed in March that it had lowered its stake in NMDC by 2 percent to 11.69 percent.

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NMDC, a central public sector undertaking, recorded a  22.3 percent jump in its consolidated net profit for the fourth quarter of FY23, amounting to Rs 2,276 crore as compared with Rs 1,862 crore in the fourth quarter of the previous fiscal year. The notable increase in the bottom line (PAT) can be attributed to an exceptional item of Rs 1,237 crore recorded during the quarter.

The company’s profit from primary operations slumped 30 percent year-on-year due to muted demand and offsetting price hikes in iron ore in March 2023. Consolidated revenue from operations also plunged 13 percent to Rs 6,785 crore in the fourth quarter.

Earnings before interest, tax, depreciation, and amortization (EBITDA) also declined by 20.6 percent to Rs 2,162 crore as against Rs 2,683 crore in the same quarter last year.

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