MOIL surged 4.98% to Rs 200.35 at 10:03 IST on BSE after the company said it has been granted prospecting license over an area of 597.44 hectares in the Nagpur and Bhandara districts by the Maharashtra state government.
The announcement was made after market hours on Wednesday, 10 July 2013.
Meanwhile, the S&P BSE Sensex was up 364.39 points or 1.89% at 19,658.51.
On BSE, 13,796 shares were traded in the counter as against average daily volume of 24,951 shares in the past one quarter.
The stock hit a high of Rs 203 and a low of Rs 195 so far during the day. The stock had hit a 52-week high of Rs 289.25 on 16 July 2012. The stock had hit a record low of Rs 187.75 on 26 June 2013.
The stock had underperformed the market over the past one month till 10 July 2013, sliding 5.61% compared with the Sensex's 0.76% fall. The scrip had also underperformed the market in past one quarter, declining 14.7% as against Sensex's 4.78% gain.
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The mid-cap company has equity capital of Rs 168 crore. Face value per share is Rs 10.
MOIL said that the total area of 597.44 hectares comprises of 11 blocks located adjacent to the existing leasehold area of MOIL in Nagpur and Bhandara districts of Maharashtra. MOIL is getting this new area for the first time since its inception in 1962. The necessary grant orders have been received by the company recently according to which, 6 blocks are located in Ramtek, Saoner and Mouda Tahsils of Nagpur district and 5 blocks are located in Tumsar Tahsil of Bhandara district. Presently, the company's existing leasehold area in Maharashtra is spread over an area of 696 hectares and with the addition of the new allotment the total area shall be 1,293 hectares reflecting an increase of 86%. The total leasehold area of MOIL shall thus increase from 1798.92 hectares to 2395.92 hectares reflecting an increase of 33.18%. This is indeed a huge increase in the area held by MOIL and this will go a long way in augmenting the production of manganese ore in the country in the coming years which in turn will help to meet the demand of steel industry to a great extent, MOIL said.
With grant of prospecting licence (PL) over the new area of 597.44 hectares, some of the areas will be utilised for expansion of the existing mines and there is a possibility of opening up of at least 4 new mines. Anticipating the grant of PL, the company has earmarked a sum of Rs 250 crore for conducting geophysical studies, exploratory drilling, etc, MOIL said. After completion of preliminary studies, the company shall convert these leases to mining leases so as to start the mining operations in the coming years. However, there will be a number of statutory clearances such as environment, forest, etc., before the new mines could be started, MOIL said in a statement. The company anticipates completing all the formalities expeditiously with the active support of the relevant government agencies.
MOIL's net profit rose 10.8% to Rs 110.08 crore on 32.3% growth in net sales to Rs 266.81 crore in Q4 March 2013 over Q4 March 2012.
MOIL presently operates 6 mines in Maharashtra and 4 mines in Madhya Pradesh. All these mines are about a century old. At present, MOIL has plans to achieve a production level of 2.2 million tons by the year 2020-2021 from the existing mines.
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