NMDC Unlimited Scope - Largest Iron Ore Producer

National Mineral Development Corporation (NMDC (NS:NMDC)) is India's largest iron ore producer and the world's sixth largest. Since inception, NMDC has been involved in the exploration of a wide range of minerals including copper, rock phosphate, limestone, magnesite, diamond, and tungsten & beach sands amongst others in some of the most remote corners of the country.

It owns and operates highly mechanized iron ore mines in Chhattisgarh and Karnataka and has its registered office at Hyderabad, Telangana. NMDC is considered to be one of the low-cost producers of iron ore in the world. It also operates the only mechanized diamond mine in India at Panna, Madhya Pradesh.

NMDC is operating four Iron Ore mechanized mines viz., Bailadila Iron Ore Mines – Kirandul Complex (Dep-14, 14 NMZ, 11B & 11C), Bailadila Iron Ore Mine – Bacheli Complex (Dep-5,10 & 11A) in the Chhattisgarh State, Donimalai Iron Ore Mine and Kumaraswamy Iron Ore Mine in the Karnataka State.

Other than Iron Ore, NMDC is the only organized producer of diamond in India from its Majhgawan mine at Panna, Madhya Pradesh.

The Company is producing about 45 MTPA of iron ore from its major iron producing units i.e. from Bailadila Sector in Chhattisgarh and Donimalai in Bellary-Hospet region in Karnataka. NMDC mining complexes are rated 5 Star by the Indian Bureau of Mines, Ministry of Mines which is a testimony to its scientific and sustainable mining practices. NMDC, a state-owned mining company in India, is actively working to expand its mineral portfolio and aims to achieve a significant mining capacity of 100 million tonnes (MNT) by the year 2030, primarily focusing on increasing its iron ore production through strategic expansions and new acquisitions.

National Mineral Development Corporation (NMDC) is mining gold in Western Australia through its subsidiary, Legacy Iron Ore Limited: 

The Mount Celia Gold Project is located in the Mount Celia deposits, which are part of the South Laverton Project. The groundbreaking ceremony for the project was held on November 5, 2023, by Shri Nagendra Nath Sinha, Secretary, the Ministry of Steel. The first ore for processing is scheduled for March 2024. Bain Global Resources holds the mining contract for the project. This is the first gold mine in NMDC's portfolio, and it's expected to be a significant contributor to India's gold production. Legacy Iron Ore also develops projects for other commodities, including iron ore, base metals, nickel, lithium, and other Rare Earths Elements (REE). NMDC is an Indian state-owned iron ore miner. It's also exploring mining opportunities for critical minerals like copper, lithium, nickel, and cobalt, which are important components in clean energy technologies.

NMDC contribution towards the Indian economy may be visible till FY 2030 and afterwards with unlimited scope. Kindly read my analysis “Indian GDP May Outperform Till FY 2040” published on 01.11.2021 in Investing.com India in which it has been analyzed that India will become the second superpower during FY 2035 and if we survive then will see that India will be Super Power in the world during FY 2050.

NMDC closed at a price of INR 223.15 on 13.11.2024.  NMDC current face value is INR 1 and its EPS (TTM) is 21.18 and its P/E is 10.54. NMDC declared a dividend of INR 7.25 during FY 2024 as interim and final dividend on 27.02.2024 and 17.09.2024.

The promoter & promoter shareholding is 60.79%. Mutual funds/Insurance & others hold 14.08%. Foreign Portfolio Investors category I & II hold 12.60%. Residents Individuals holding is 10.68%.

The board of NMDC has approved a bonus issue of equity shares in the proportion of 2:1, which means for every one share investors hold in the company, they will get two additional shares. All shareholders who own shares of the firm before the record date, which is determined by the firm, are eligible for additional shares. The company's second-quarter results, where it has reported 23% year-on-year (YoY) growth in its standalone net profit to Rs 1,269 crore. Revenue from operations during the period increased 20% YoY to Rs.4807 crore.

The future of the NMDC looks very bright if investors hold it for a long term i.e. 15-20 years. After allotment of bonus issue when its price will be settled then as per estimate, NMDC may give many fold returns in future. NMDC may give a lucrative dividend after a few years to investors if calculated after bonus price which may be competitive to Bank interest rates. The investor’s self-vigilance on the NMDC share is essential and its detailed analysis is required in future for the safety of their own investment.