Fri Dec 27 15:55:42 UTC 2024: ## NMDC Shares Dip Despite Bonus Issue Announcement

**Mumbai, December 27, 2024** – Shares of NMDC, India’s largest iron ore producer, fell 7% in six days, despite the company issuing bonus shares in a 2:1 ratio. While the stock opened higher on the National Stock Exchange (NSE) at ₹71.84, it succumbed to selling pressure, closing lower. The bonus shares, totaling 586,12,11,700 with a face value of ₹1 each, are to be credited to eligible shareholders (as of December 27th, the record date) on December 30th, becoming tradable from December 31st.

The share price decline, however, is attributed to multiple factors beyond the bonus issue. Concerns over the Karnataka Mineral Tax Bill 2024, which proposes a retrospective tax hike on iron ore mining, are weighing heavily on investor sentiment. This could increase NMDC’s costs by 22%, impacting profit margins significantly, although private miners face an even steeper 45% increase. The broader market conditions and iron ore market dynamics are also contributing to the pressure on NMDC shares. While the tax hike may benefit public sector miners like NMDC in the long run by altering competitive dynamics, the short-term impact appears negative.

Analysts suggest that while the bonus share issuance might offer a short-term positive, investors should closely monitor the situation surrounding the Karnataka tax bill and its long-term implications for NMDC’s profitability.

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