NMDC Steel - Favorable Risk-Reward: Systematix

BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy. .Systematix Research Report.We look at possible scenarios emerging for NMDC Steel Ltd. NMDC Steel was recently demerged from NMDC Ltd. at a ratio of 1:1 and trades at Rs 33/share currently. Valuation for NMDC Steel is interesting as-the Government of India is divesting its 50.79% stake in NMDC Steel through competitive bidding, GoI will transfer its 10% stake to NMDC, andthis will trigger an open offer for 26% minority stake. NMDC Steel is a three million tonne steel plant set up by NMDC and has been in the works for more than a decade. It is spread over 1930 acres and has the optionality to increase capacity to 6 mt. According to the management-major construction work is complete and Rs 210 billion has already been spent with about Rs 20-25 billion remaining to be spent,the plant is expected to commission by April 2023 and production of 1 mt is envisaged in the first year of operations. We believe any potential acquirer would weigh the likely positives such as long-term iron ore supply arrangement with NMDC at 135 km, port proximity of 300 km and negatives such as lack of adequate captive power, limited steel eco-system in the catchment area, and limited scalability optionality to 6 mt based on the current configuration. News reports indicate that JSW Steel Ltd., ArcelorMittal Nippon Steel India Ltd., Jindal Steel and Power Ltd., Essar Steel, and Adani Enterprises Ltd. are the shortlisted bidders..Click on the attachment to read the full report:.NMDC - Iron Ore Prepping Up For A Rally: Motilal Oswal.DISCLAIMERThis report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

NMDC Steel - Favorable Risk-Reward: Systematix

NMDC Steel is a three million tonne steel plant set up by NMDC and has been in the works for more than a decade.

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