On Wednesday, December 18, state-owned NMDC Ltd.’s stock fell 7% as a result of media reports that the Karnataka government is thinking of raising the tax on iron ore mining.
The stock continued to drop for the sixth consecutive session since December 11 when it hit its intra-day low of ₹211.35. During this time, it lost more than 13 per cent. While the stock has gained just 1% so far in 2024 YTD, it has already lost 7% in December alone.
A law to tax mines and mining land has been filed by the Karnataka administration, which is governed by Siddaramaiah. The law reportedly calls for a tariff of between ₹20 and ₹100 per tonne for a variety of minerals, which could bring in ₹4,207.95 crore a year, plus an extra ₹505.9 crore from land-bearing mineral taxes. According to reports, the state government is anticipated to make a decision shortly after the draft of the higher iron ore duty circulated lately.
The Karnataka (Mineral Rights & Bearing Land) tax bill was adopted by the Karnataka cabinet last week. The state government wants to collect more than ₹10,000crorese in iron ore duty this year because Karnataka is the largest producer of iron ore and holds 78 per cent of India’s total reserves.
With around 35% of NMDC’s total output mix, Karnataka plays a vital role in the company’s operations.
In the past, the Supreme Court had given states permission to collect mining taxes retroactively starting in 2005. Industry analysts warned that there could be serious financial repercussions from this August ruling, with arrears perhaps reaching ₹1.5 lakh crore to ₹2 lakh crore.
The record and declared dates for the 2:1 bonus equity share distribution were finalized by NMDC on Tuesday.
In a BSE filing, NMDC stated, “Concerning 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 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, by SEBI circular dated September 16, 2024,” the company added.
