NMDC's shares decline as LIC sells 2% stake for the second time
Life Insurance Corporation (LIC) has reduced its stake in state-run company NMDC by 2% between March 14, 2023, and June 20, 2023. As a result, NMDC shares saw a slight decline in early trade, with the stock quoting at ₹106 per share at 2:20 pm, down 0.2 percent from the previous day's close on the NSE.
This is the second time LIC has divested a 2% stake in NMDC, bringing its holding down to 9.6% from 11.6%. Despite the reduction in stake, NMDC recorded a 22.3% increase in consolidated net profit for Q4 of FY23, amounting to Rs 2,276 crore. However, the company faced challenges in its primary operations, with profit dropping by 30% year-on-year due to muted demand and offsetting price hikes in iron ore. Consolidated revenue from operations also plunged 13% to ₹ 6,785 crore in the fourth quarter.
NMDC's earnings before interest, tax, depreciation, and amortization (EBITDA) declined by 20.6% to ₹ 2,162 crore compared to the same quarter last year. The market will closely watch NMDC's performance in the coming quarters to assess its ability to adapt to market conditions and maintain profitability.
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