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NMDC, the state-owned mining giant, has announced significant developments with a 2:1 bonus issue approved by its Board and impressive financial performance in the second quarter of the current fiscal year. The company's decision to issue bonus shares signifies its robust financial health and optimistic outlook for the future. This move will reward existing shareholders by increasing their shareholding, potentially boosting investor confidence and market value.
The bonus issue, set to be implemented on or before January 10, will see the issuance of two new fully paid-up equity shares for every existing share held by shareholders on the record date. To finance this initiative, the company will capitalize ₹103.40 crore from its Capital Redemption Reserve and ₹482.72 crore from its General Reserve. This demonstrates NMDC's strong financial standing and its ability to reward shareholders with a tangible benefit. The company's commitment to shareholder value is further emphasized by its substantial Free Reserves for capitalisation, amounting to ₹25,285.76 crore as of March 31.
Beyond the bonus issue, NMDC's Q2 financial performance reflects its strong position in the market. The company reported a 23% year-on-year increase in its standalone net profit, reaching ₹1,268.96 crore compared to ₹1,027.63 crore in the same period last year. Although there was a sequential decline of 36% compared to the previous quarter, this is expected given the cyclical nature of the mining industry. The company's revenue from operations for the second quarter also saw a significant jump, increasing nearly 20% to ₹4,806.57 crore, highlighting the demand for iron ore and NMDC's ability to capitalize on market opportunities.
Looking at the broader picture, NMDC's performance over the first six months of the fiscal year reveals a consistent upward trend. Net profit for the period grew by over 21% to ₹3,252.93 crore, while revenue from operations rose by 8% to ₹10,184.37 crore. This demonstrates the company's resilience and its ability to navigate economic challenges. On a consolidated basis, NMDC's net profit for the September quarter was nearly 17% higher year on year, reaching ₹1,195.63 crore, while revenue from operations increased to ₹4,918.91 crore. This indicates the company's robust performance across various business segments.
Overall, NMDC's recent developments are positive indicators of its financial strength and commitment to shareholder value. The bonus issue, coupled with strong Q2 financial performance, reinforces its position as a leading player in the mining sector. As NMDC continues to capitalize on market opportunities and execute its strategic plans, it is well-positioned for continued growth and success in the years to come.
Source: NMDC gets Board nod for 2:1 bonus issue, posts 23% yoy increase in Q2 net to ₹1,269 cr