NMDC’s fate hangs on outcome of Karnataka mining bill that increases royalty payable by company
Live MintNMDC Ltd's shares have declined about 20% since its December high, after the Karnataka Tax Bill, 2024, was passed by the state legislative assembly. Even though NMDC, the largest iron ore producer in India, can pass on the proposed levy, recovering past dues arising from a retrospective provision in the bill will be a challenge. “The proposed taxes by Karnataka, if fully absorbed by NMDC, would impact FY26 estimated Ebitda 12.6%/43.3% in case it is applied only in Karnataka/across all states," Kotak’s analysts said in a report on 10 February. “Given that NMDC’s stock price has already fallen by a similar amount since the announcement of the bill in December, we believe this development is largely factored into the current market price," Elara Securities said in a 10 February report. A pick-up in sales volumes, despite lower realisation, is expected to help NMDC report higher Ebitda growth in Q4.
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