NMDC shares fall 7% on reports of Karnataka’s proposed iron ore duty hike, down for 6th straight session | Stock Market News
Shares of state-run NMDC Ltd. dropped 7 percent on Wednesday, December 18, following media reports that the Karnataka government is considering an increase in the duty on iron ore mining.
The stock fell to its intra-day low of ₹211.35, extending its decline for the sixth straight session since December 11. In this period, it shed over 13 percent. Just in December so far, the stock has lost 7 percent while overall in 2024 YTD, it has added just 1 percent.
The Siddaramaiah-led Karnataka government has introduced a bill aimed at taxing mines and mining land. According to reports, the bill proposes a levy ranging from ₹20 to ₹100 per tonne for various minerals, potentially generating ₹4,207.95 crore in revenue annually, with an additional ₹505.9 crore from land-bearing mineral taxes. Reports suggest the draft regarding the increased iron ore duty circulated recently, and a decision from the state government is expected soon.
Last week, the Karnataka cabinet approved the Karnataka (Mineral Rights & Bearing Land) tax bill. As Karnataka accounts for 78 percent of India’s total iron ore reserves and is the leading iron ore producer, the state government aims to collect over ₹10,000 crore in iron ore duty this year.
Karnataka is a critical contributor to NMDC’s operations, accounting for nearly 35 percent of the company’s overall production mix.
The Supreme Court had previously approved states to collect mining taxes retrospectively from 2005. Following this verdict in August, industry experts indicated that this could lead to significant financial implications, with arrears potentially amounting to ₹1.5 lakh crore to ₹2 lakh crore.
On Tuesday, NMDC finalized the record and deemed dates for the allotment of bonus equity shares in a 2:1 ratio.
In a BSE filing, NMDC stated, “With reference to our previous intimation dated November 11, 2024, and on receipt of shareholder approval at the Extraordinary General Meeting held on December 12, 2024, we wish to inform you that the Company has received in-principle approval under Regulation 28(1) of SEBI LODR, 2015, from BSE Ltd and National Stock Exchange of India Ltd via their letters dated December 16, 2024, for the issuance and proposed allotment of 586,12,11,700 equity shares of Re 1/- each as bonus shares in the ratio of 2 (two) new equity shares for every 1 (one) existing equity share held in the Company.”
The company has set Friday, December 27, 2024, as the record date to determine shareholder eligibility for these bonus shares. “The deemed date of allotment shall be Monday, December 30, 2024, for the purpose of allotment of the said Bonus Shares of the Company. Further, these Bonus Shares will be made available for trading on the next working date of allotment i.e., Tuesday, December 31, 2024, in accordance with SEBI circular dated September 16, 2024,” the company added.
