Even if the iron ore prices tank, it should revert back to a price at which it is still worth mining it profitably so I think NMDC might have a good margin of safety right now because of the low iron ore prices. Isn’t the market completely disregarding the value of the steel plant? Even if the steel plant fetches 1/3rd of the capital employed in erecting it, it is still good value for the investors in my opinion.
Since the govt seeks a good dividend payout from the NMDC, I feel NMDC is at the very least a much better investment than a bank FD with a decent dividend yield, ignored steel plant investment, and the profitable iron ore mining business.
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