The government has approved sale of 10 per cent equity in Shipping Corporation of India. The biggest domestic shipping company would also raise 10 per cent additional equity to fund its expansion plans.
The government holds 80.12 per cent stake in SCI. It will sell 42.3 million shares and the company will issue as many shares. The public offer will bring down government stake in the company to 63.75 per cent. "The time line is yet to be fixed. But it will happen in this financial year," said S Hajara, chairman of SCI.
At current valuation, the issue is likely to raise Rs 1,400 crore. "The price band will be fixed by the empowered committee," Hajara added. SCI, whose shares closed at Rs 168, up 0.45 per cent on the Bombay Stock Exchange today, owns 75 ships with a capacity of 5.10 million DWT (Dead Weightage Tonnage).
Retail investors and employees will get five per cent discount on the issue price. The government has also reserved 0.5 per cent of the issue size for employees of the company, said a statement issued after a meeting of the Cabinet Committee on Economic Affairs (CCEA). The government plans to raise Rs 40,000 crore this year through disinvestment. Experts say the market appetite for public issues is good, with the Sensex touching a 32-month high last week.
