Amid the demerger news, the shares of NMDC, a state-run iron ore company, jumped over 5 per cent to Rs 174.70 per share on the BSE intraday trade on Tuesday. The scrip till 03:15 was trading around 166-167 per share levels until the company filed a statement to exchanges.

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“The Board of Directors of NMDC Limited, at its meeting held today, July 13, 2021, has approved the Scheme of Arrangement for Demerger between NMDC Limited (“Demerged Company") and NMDC Steel Limited ("Resulting Company").” NMDC said in a filing to exchanges on Tuesday.

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The said scheme is subject to necessary statutory and regulatory approvals including the approval of the market regulator Securities and Exchange Board of India, stock exchanges, Ministry of Corporate Affairs, Government of India, and respective shareholders and creditors, the company further said.

''The Demerged Undertaking would be vested with NMDC Steel Limited pursuant to the demerger. The entire share capital of the NMDC Steel Limited held by the NMDC Limited would be cancel led and new equity shares of NMDC Steel Limited (in a manner as elucidated in the Scheme) would be issued to all the shareholders of NMDC Limited in the same proportion,'' it said.

NMDC Limited is a government company and is engaged in the exploration of wide range of minerals including iron ore, copper, rock phosphate, limestone, dolomite, gypsum, bentonite, magnesite, diamond, tin, tungsten, graphite, and beach sands.

Whereas, NMDC Steel is a wholly-owned subsidiary of NMDC Limited. NMDC Steel currently does not have any business operations. It is authorized by its Memorandum of Association to carry on the business of, amongst others, manufacturing, prospecting, raising, operating, buying, selling, importing, exporting or otherwise dealing in various categories of steel and iron ore.

The scrip was trading mute the whole session, however, rallied post the filing and closed almost 4 per cent higher to Rs 172.05 per share on the BSE, as compared to 0.76 per rise in the BSE Sensex.