The full form of NMDC is National Mineral Development Corporation. It is a public sector company and falls under the Mining Sector.
NMDC Ltd. was founded on November 15, 1958. It was incorporated under the Companies Act. It is the only mechanized diamond mine in the country.
The Government of India owns NMDC Ltd. through the Ministry of Steel. NMDC is the largest exporter & producer of iron ore in India. They are involved in the research of a wide range of minerals. This includes iron ore, copper, rock phosphate, limestone etc.
NMDC produces more than 30 million tones of iron ore from its Karnataka and Chhattisgarh mines. It also manages a diamond mine at Panna whose annual output is over one lakh carats.
NMDC has done pioneering research for developing iron ore mines in Karnataka. It covers regions like Donimalai, Kudremukh, Kumaraswam, Bababudan, and Ramandurg. NMDC developed the Donimalai iron ore mine to export iron ore to Japan and South Korea.
Bailadila iron ore mine is the first large scale open cast mechanised iron ore mine in India.
Main objectives of NMDC : –
Meeting the rising mineral demands of the domestic as well as foreign markets.
Increasing operations in the field of mineral processing to meet global requirements.
Raising iron ore output to 67 MTPA by 2021-22
Setting up the Nagarnar Steel Plant and achieve excellence in the field.
Key Personnel’s NMDC India Limited. :
Shri Sumit Deb – Chairman – Managing Director
Shri P.K. Satpathy – Director (Production)
Shri Amitava Mukherjee – Director (Finance)
Shri Alok Kumar Mehta – Director (Commercial)
Shri Somnath Nandi – Director (Technical)
Smt. Rasika Chaube – Director
Smt. SukritiLikhi – Director
Shareholding Pattern of NMDC :
Mar 2020
Jun 2020
Sep 2020
Dec 2020
Mar 2021
Promoters (%)
69.65
69.65
69.65
69.65
68.29
FIIs (%)
6.03
5.35
4.45
4.46
4.63
DIIs (%)
19.96
20.33
20.44
20.42
20.67
Government (%)
0.1
0.1
0.1
0.1
0.1
Public (%)
4.27
4.58
5.36
5.37
6.31
Profit & Loss Account of NMDC Ltd. (Figures in Rs. Crores) :
Pros: High Pricing Power :
The business enjoys relatively high pricing power. The administrative control is able to withstand competitive pressure. The same works as a great moat for equity shareholders of the company.
Zero Debt :
The company has a negligible debt to equity ratio of 0.02. Thus, the equity shareholders carry lower risk of holding the stock.
Cons:Poor Cash Flow Conversion :
The business has a very poor cash conversion ratio. Only 33.12% of operating earnings are converted into operating cash flow. This implies that increase in profits has not translated into higher cash flows.
Capital Intensive Business :
The company operates an extremely capital-intensive business with a low asset turnover of 0.60. This impacts return on equity negatively and reduces shareholder returns.
Any growth in the business must be funded either by increasing borrowings or diluting share holding because of it capital-intensive nature. Both of these negatively impacts shareholder value and returns.
Visit NMDC Ltd.’s share page to read more about its pros and cons.
Peer Comparison of NMDC Ltd. :
Company
Market Cap (Rs. Cr)
P/E
Roce (%)
ROE (%)
Dividend Yield (%):
NMDC
58,565
15.5
22.6
13.3
3.88
MOIL Ltd
4,462
42.9
11.4
8.31
3.19
AshapuraMinechem Ltd
1,473
3.65
-15.4
0
0
Sandur Manganese & Iron Ores Ltd
1,427
11.1
37.5
23.8
0.56
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