NMDC Limited is tapping the capital markets with an offer for sale of 33.22 cr shares in a price band which would be available late in the evening on Monday the 8th of March 2010. The issue opens on Wednesday the 10th of March and closes on Friday the 12th of March 2010.

The company had its roadshow yesterday in Mumbai and based on the same some comments and views on the issue. NMDC is a listed entity with a very small float. The scrip closed yesterday at Rs 435.15 and the market cap at this price is Rs 172524 crs.

The question on everybody’s mind is at what price this issue would come at. This unlike NTPC and REC will not have a floor price but will have like all IPO’s a price band.

I believe the price band for this issue would be of the maximum permissible band of 20%. I also believe that to make a fair price for this share the government would not lay over-emphasis on the current market price and give due weightage to peer group valuations. In this context one should not be surprised if the price band at the upper band is slightly in excess of Rs 300. The underlying thought is to revive the capital markets and the interest of the retail and HNI categories.

One should remember that considering the public sentiment, there is a five percent discount to retail investors in this issue. As a concluding remark I believe that if these thoughts are echoed in the price band to be announced on Monday evening, the issue would garner support.