Demerger of NMDC Steel from NMDC approved by Ministry of Corporate Affairs

NMDC demerger news: The Ministry of Corporate Affairs (MCA) has approved the demerger of NMDC Steel from NMDC, according to a late evening exchange filing by the company on Tuesday, October 11. NMDC, the state-owned company under the Ministry of Steel, is the country's largest iron ore producer.

After approval for demerger was received from the Ministry of Corporate Affairs (MCA) on October 6, the company is now in the process of complying with the requirements as envisaged in the ministry’s order.

Earlier in 2020, the Cabinet Committee on Economic Affairs had given an in-principle nod to the demerger of the steel business from NMDC. Besides, the Cabinet had also granted in-principle approval for the disinvestment of the steel business. The government holds a 60.79 per cent stake in NMDC.

As a part of the demerger scheme, NDMC's assets worth Rs 18,650 crore and liabilities worth over Rs 1,600 crore will be demerged to NMDC Steel. NMDC shareholders will be eligible to get one share of NMDC Steel for every equity share held. Also, NMDC Steel will be listed on the exchanges.

The Ministry of Steel had in March this year approved the demerger.

Notably, Zee Business had last month reported that a final observation letter will be issued soon by the Ministry of Corporate Affairs. The listing of the steel business after demerger will likely be completed by mid-November.

NMDC share price on Wednesday gained 1 per cent in early trade. At 9:20 am, the stock was quoting a price of Rs 132 on the NSE. The scrip has yielded a negative return of over 20 per cent in the last 6 months. NMDC stock 52-week range is Rs 175.35 - Rs 99.60.