Fri Dec 27 15:55:40 UTC 2024: ## NMDC Stock Surges After 2:1 Bonus Issue, Despite Market Volatility

**Mumbai, India** – NMDC Ltd., a public sector undertaking (PSU), saw its shares jump 0.60% to ₹71.84 on the National Stock Exchange (NSE) today, following a 2:1 bonus issue. However, this increase is adjusted for the bonus; the unadjusted closing price shows a significant 66.50% drop from yesterday’s ₹214.45. Some brokerage trading apps may still display the unadjusted price, potentially misleading investors.

The bonus issue, effective today, means existing shareholders received two additional shares for every one held. Unlike stock splits, bonus shares are issued at the existing face value, increasing the number of outstanding shares but reducing per-share metrics like earnings per share (EPS) and book value. The record date for the bonus issue was December 27th.

While the bonus issue boosts liquidity, analysts hold mixed views on the stock’s future. ICICI Securities maintains an “ADD” rating, while Sharekhan, projecting an 8% CAGR volume growth for NMDC from FY24-27, anticipates iron ore demand to follow the growth of the steel sector. However, Sharekhan also notes that weak steel demand is pressuring iron ore prices, and the recent 17-18% price increase by NMDC may be unsustainable. Therefore, Sharekhan maintains a “Hold” rating due to pricing uncertainties, despite expecting good volume growth in the coming years. The stock currently trades at a 5.3x /4.8x its FY26/27 EV/Ebitda.

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