Over the past five years, NMDC has traded at an average EV/EBITDA of 11.1x, compared to its upper band price valuation of 3.6x FY2014E EV/EBITDA. A strong balance sheet, presence in sellers market (iron ore), low cost of production, high-grade mines and long mine life make NMDC an attractive bet in our view. Valuing the stock at 5.5x FY2014E EV/EBITDA, we derive a fair price of Rs198 and recommend investors to Subscribe to the issue at the upper price band of Rs150.

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