GMDC shares rally 11% to hit new highs; Here's what is pushing the stock higher

Shares of Gujarat Mineral Development Corporation Ltd (GMDC) surged more than 11 per cent during the early trading session on Tuesday after the company announced its approval of the environmental clearance for its capacity expansion. The company announced about the same through an exchange filing on Monday.

The state-owned mining player Gujarat Mineral Development Corporation (GMDC) announces the approval of the environmental clearance for the capacity expansion from 3 MTPA to 5 MTPA of lignite for Surkha(N) lignite mine, by the Ministry of Environment, Forest, and Climate Change (MOEFCC), said the exchange filing.

"The Surkha(N) lignite mine holds strategic importance for GMDC, representing a significant leap forward in the company's growth trajectory. This expansion not only signifies increased production but also aligns with GMDC's commitment to sustainability and responsible resource utilization," it added.

Following the announcement, shares of GMDC surged more than 11 per cent to Rs 502.15 on Tuesday, hitting its new 52-week high, commanding a total market capitalization close to Rs 16,000 crore. The scrip had settled at Rs 452.15 in the previous trading session on Monday.

Shares of GMDC have rallied 310 per cent from its 52-week low at Rs 122.75, hit on March 28, 2023. The stock has zoomed about 1,575 per cent from its covid-19 lows. The stock has surged about 200 per cent in the last six-month period, while it is up 20 per cent in the last one month.

Roopwant Singh, IAS and Managing Director of GMDC said that the approval of environmental clearance for the capacity expansion of Surkha(N) lignite mine is a pivotal moment for the company. This project's success is integral to overall growth and revenue generation perspective.

"Taking a leap, with the engagement of two Turnkey Mining contracts at Surkha(N) Lignite Mine, GMDC sets to scale up its production targets. The enhanced lignite production capacity is expected to drive substantial revenue growth for GMDC. As Gujarat's foremost mining entity, GMDC plays a crucial role in the state's economic landscape," he added.

Gujarat Mineral Development Corporation is a state public undertaking of the Government of Gujarat. The state-owned company currently has five operational lignite mines located in Kutch, South Gujarat, and Bhavnagar region. It is purportedly the largest merchant seller of lignite in the country.

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