Correction in Nalco an opportunity for investors

Improving alumina, aluminium volumes, realisation point to strong prospects

The government started its FY18 divestment process with up to 10 per cent stake sale in National Aluminium Company or Nalco, on Wednesday. With the floor price at Rs 67 compared to the stock’s closing of Rs 73 on Tuesday, the stock fell seven per cent. Though near-term pressure due to geo-political events could pressure base metal prices, longer-term outlook remains firm. And now, with divestment behind, the road ahead looks good.

Nalco has seen strong turnaround in prospects, with base metal prices rallying on London Metal Exchange (LME) during 15 months. Tonne price of aluminium surged from sub-$1,500 on