NMDC Steel ( NSL ) – A Unique Demerger Opportunity

Valuation:

1. Replacement value = 8000 Cr per MTPA i.e. 24,000 Cr for 3MTPA
   Enterprise Value = Mkt Cap + Debt – Cash =14,041+6662-721 = 19982
   For EV=Replacement value . price per share is 61.6 INR

2. EV/EBITDA = 6 (industry standard)
   19982/EBITDA = 6
   EBITDA required = 3330 cr (for current valuation i.e. 48.9/share)

JSW & Tata – EBITDA per MTPA is 800-1000 cr

From EV/EBITDA perspective the company looks fairly valued & from Replacement value perspective the company is underpriced.

Pls correct/modify , in case i miss anything.

Disc : Holding at 48 levels