The Orissa Minerals Development Company Ltd - Stock Valuation and Financial Performance

Orissa Minerals Development Company, incorporated in the year 1918, is one of the oldest iron ore mining companies. It is part of the Bird group of companies under the administrative control of the Ministry of Steel, Government of India. The registered office is at FD-350 Salt Lake City, Sector III, Kolkata-700106. The Bisra Stone Lime Company, Karanpura Development Company, Scott & Saxby, Eastern Investments, Burrakur Coal Company (under liquidation), and Borrea Coal Company (under liquidation) are other group companies.

Business of the company:

The company is engaged in mining and producing iron ore and manganese ore. They also produce sponge iron. Apart from mining and marketing of iron ore, the company is also engaged in the field of mining and marketing of manganese ore. The company has six mining leases in the Keonjhar district of Orissa. With respect to the Bagiaburu iron ore mines (21.52 hectares) and Bhadrasai iron and manganese mines (998.7 hectares), the lease period is valid up to September 30, 2010. Renewal is pending regarding the remaining four leases. A 100 TPD sponge iron plant has been set up and measures taken to enhance crushing capacity by installing and commissioning an additional crushing and screening plant.

History of the company:

The Bird Group of Companies was nationalized by the Government of India. Consequent upon such nationalization of the Undertaking, the shares held by the said company in twenty one companies were transferred in the name of the President of India. After the company came under the Ministry of Steel, Government of India, the Government extended financial support to the company in the Development of Mines, Clearing outstanding dues, creating facilities for sizing iron ore and Replacement of old/ worn out equipment and providing new equipment.

 In the year 1992, the company set up a joint venture company, namely East India Minerals for production of sponge grade iron ore. In June 2004, as a part of diversification, the company set up a 100 TPD Sponge Iron Plant and the plant started making commercial production. They entered into the venture of direct export of iron ore fines from the year 2005-06.

During the year 2009-10, the restructuring scheme for the Bird Group of Companies as approved by the Ministry of Steel Government of India and also the Union Cabinet was implemented with effect from March 19, 2010. Thus, the group has transformed from a government managed company to a government company.

As per the scheme Eastern Investments, another company under the group, in pursuit of making OMDC as their subsidiary in due compliance of the terms of the approved scheme acquired requisite number of shares of OMDC, major from the President of India on share swap basis and balance from LICI on direct payment basis. As of March 19, 2010, Eastern Investments held 50.01% interest in the company. Thus, OMDC became a subsidiary company of Eastern Investments. As Eastern Investments was converted to a government company consequent to their preferential allotment of equivalent number of shares in the name of the President of India, OMDC as subsidiary of Eastern Investments also attained the status of a government company.The equity shares of the company were listed on the National Stock Exchange with effect from September 29, 2010.