LIC picks up 2% more in NMDC for ₹1,116 cr

Our Bureau Updated - December 07, 2021 at 02:25 AM.

“LIC would have invested with a 5-10 year horizon, as the dividend yield is about six per cent from the company.”

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Life Insurance Corporation has acquired an additional two per cent stake in NMDC for ₹1,116 crore from the open market over the past one month.

The current purchase of 79,839,172 equity shares will push up LIC’s holding in NMDC to 10.12 per cent from 8.11 per cent, said the mining major in a statement on the BSE.

Goutam Chakraborty, Research Analyst, Emkay Global Financial Services, said the insurance company would have invested with a 5-10 year horizon, as the dividend yield is about six per cent from the company.

The prospects of NMDC in the short term appear to be challenging with iron ore prices in international markets falling steeply. NMDC also lacks adequate infrastructure to evacuate ores from its mines.

This apart, he said, the domestic supply of iron ore is expected to go up with the government planning to open up production in more mines in Karnataka and Odisha through the bidding process.

“Investors would do well to keep away from the stock if they are looking at 2-3 years investment opportunity,” he said.

Shares of the company were down three per cent at ₹131 on Wednesday.

Published on May 6, 2015 17:40