IMFA stock soars to 52-week with record-breaking volumes on land valuation windfall

Indian markets have recovered from lower levels on Monday and were seen trading in the green during the afternoon trading session, with Nifty and Sensex up by 0.24% and 0.27%, respectively. Keeping pace with the up-move of frontline indices, the broader markets were also trading with gains of 0.36% (Nifty Mid-cap) and 0.30% (Nifty Small-cap). The advance-decline ratio favours advances, with 1095 stocks trading in the green and 890 stocks trading in the red on NSE.

Amidst a healthy advance-decline ratio, there is one small-cap stock that has surged with full vigour: Indian Metals and Ferro Alloys Ltd (IMFA). The company primarily produces ferroalloys, including charge chrome (high carbon ferrochrome), and has an installed furnace capacity of 190 MVA (2,84,000 metric tonnes per annum (MTPA)) at its two plant sites in Therubali and Choudwar, Odisha. The company’s operations are supported by a 200-MW captive thermal power plant in Choudwar, captive chromite mines, and a 4.5-MW solar power plant.

The stock has jumped 13% and was seen trading at Rs 441 on the NSE. Interestingly, the stock has logged a fresh 52-week high as well. What’s striking is the fact that we are only halfway through the trading session on Monday, and the stock has already registered its highest single-day volume in the last two years.

So, what’s the news that is aiding the stock price movement?

As of December 14, 2022, a letter from the company had already received a compensation of Rs 20.69 crore towards reimbursement of statutory expenses. But now, the company has informed that the Office of Nominated Authority, Ministry of Coal, Government of India, through its Provisional Compensation Order, has determined the valuation of compensation for freehold and leasehold land pertaining to Utkal ‘C’ Coal Mines at Rs 416,70,57,065 (Rupees four hundred sixteen crore seventy lakh fifty-seven thousand sixty-five only), payable to the company’s subsidiary, Utkal Coal Limited (UCL).

The Successful Allottee has been directed to deposit the amount within 7 days of receiving the order in the designated account of the Ministry of Coal, Government of India. The compensation towards the valuation of Mine Infrastructure is currently in progress.

The stock has gained nearly 53% in the last year and offers a healthy dividend yield of 2.31%.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.