National Mineral Development Corporation – NMDC is Coming out with its FPO on March 10. The issue is open from March 10 – March 12. The Promoter, Government of India, is to announce the price band on March 9, one day before the issue opens.
Let us do some number crunching on its past performance, so as to arrive the expected price band. For FY09, the total income of the company was at Rs. 8,575 crores with PAT at Rs. 4,372 crores, resulting in an EPS of Rs.10 with a Book value of Rs. 29. For FY10, the EPS estimates are at Rs.10 and book value of Rs. 39.
The other large cap stocks in this sector are Sesa Goa and GMDC which quote at 19 P/E and 18 P/E, respectively. Sesa Goa at Current price quotes at Price to Book Value of 7 and GMDC at P/BV of about 4.
Hence going by these numbers, NMDC between 250-270 would be a reasonably price to apply.