The words “mining and minerals” must spell rich for the investors. Or how could the shares of a company, that showed “nil turnover” in the quarter ending June 30 is quoting at an astronomical value of close to Rs 50,000 per share of Rs 10 face value?

That this value is about 40 per cent lower than its 52-week high price of Rs 92,200 on the BSE (on Nov 15, 2010) is all the more amazing.

The company, Orissa Minerals Development Company Ltd, a Government of India enterprise, in a notification to the stock exchanges today, said that a meeting of the board of directors will on November 9 consider the proposal for sub-division of face value of shares.

It was on September 19, the company had stated 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.”

After touching day's high of Rs 50,200, OMDC shares closed lower at Rs 48,628 on the BSE with 2,282 shares changing hands.

During fiscal year 2010-11, the company had a net income of Rs 44.82 crore. The total expenditure was in fact higher than the income at Rs 60.70 crore. However, boosted by other income of Rs 49.39 crore, the company posted a net profit of Rs 22.12 crore. With a paid-up capital of a mere Rs 60 lakh, the company's EPS touched an astronomical level of Rs 368.69.

In the first quarter of current year, OMDC showed “nil income” and the profit from operations before other income was negative at Rs 12.72 crore. It was again the other income of Rs 17.61 crore that came to the company's rescue and the company posted net profit of Rs 3.26 crore

With a public shareholding of 49.99 per cent, OMDC should be creating several millionaires! The share hit its 52-week high price of Rs 92,200 on Nov 15, 2010 on the BSE and its 52-week low is no mean number at Rs 39,401.05 (August 19).

The Chairman of OMDC, Mr A.P. Choudhary, at the AGM on September 16, said following the implementation of a restructuring scheme of the Bird Group of Companies, approved by the Union Cabinet, 51 per cent of the shareholding of the Government of India in Eastern Investments Ltd (EIL) was acquired by Rashtriya Ispat Nigam Ltd (RINL). This makes RINL the holding company of EIL and its subsidiaries OMDC and BSLC, with effect from January 5, 2011.

He said though the year witnessed firming up of iron ore prices, OMDC could not capitalise on rising trend of prices due to “closure of all its mines on account of non-availability of required statutory forest and environmental clearances.” Four mines remained inoperative, while two small mines: Bhadrasai Iron and Manganese Ore mines and Bagiaburu Iron ore Mines produced small quantities of iron and manganese ores till September 30, when the lease period of both the mines expired.

He said financial performance was much below the expectations as all the six mines were inoperative, mainly on account of non-availability of forest & environment clearance. This has severely dented the financial performance. He expected the fiscal year 2012-13 to be better with several clearances expected for mining. The management has taken steps to install 2 million tonnes per annum beneficiation and 2 million tonnes pellet plant. The Techno Economic Feasibility Report has been completed and placed under the consideration of the board. All formalities for obtaining single window clearance from the Government of Orissa for allotment of required land, power and water for the beneficiation and pellet plant have almost been completed, he added.

Still how the company's shares have come to be valued so highly is difficult to fathom in the absence of financial performance.

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