OMDC
Orissa Mineral Development Corporation (OMDC) continues to leave a bad taste. The company, a PSU, had announced bonus only to first delay the date and then abruptly announced a cancellation of bonus plan and instead went for a stock split. The see-saw ride for investors, where many were left in a lurch continues to remain a sore point. On 19th Sept’12, the company had issued a statement saying that “at present there is no such specific plan about the stock split and bonus issue. However, in near future, there may be action in this regard.” Near future was really very near – on 9th Nov’12 it announced a stock split. Such governance issues from PSUs leaves little hope for others!
This company does not have a turnover, there is no net sales earned neither in Q4Fy13 nor in Q1FY14. Yet, on the virtue of ‘other income’ of Rs.15 crore, the company posted a net profit of Rs.26 lakh, down from Rs.4 crore in Q4 and Rs,3 crore in previous Q1. Despite no real performance to talk about, it is quoted at a mind boggling Rs.1732. This price is near its low yet it mocks the lack of financial performance. Around 30 lakh shares are in the public float of its total equity of Rs.60 lakh. Following the implementation of a restructuring scheme of the Bird Group of Companies, approved by the Union Cabinet, 51% of the shareholding of the Government of India, in Eastern Investments Ltd (EIL) was acquired by Rashtriya Ispat Nigam Ltd (RINL). This means RINL is the holding company of EIL and its subsidiaries OMDC and BSLC. The company has six mines of which four are inoperative and the lease of two other mines expired in Sept’12. Thus the stock price is merely for the ‘mines’ fascination and the huge reserves of Rs.811 crore. Hope of a bonus probably does not die though the company remains inoperative. Operations will begin only once all forest clearances come in and its proposed 2 million tonnes per annum beneficiation and 2 million tonnes pellet plant takes off.