Govt fixes Shipping Corp FPO price at Rs 140 a share

The government yesterday fixed the issue price of state-owned Shipping Corporation follow-on offer at Rs 140 a share i.e. at the upper end of the price band.

According to a source The government has fixed Shipping Corporation's FPO issue price at Rs 140 per share -- the upper end of the price band.

The government by this offer will raise around Rs 1,160 crore. The price band of SCI has been fixed at Rs 135 to Rs 140 by the government.

He said that the government's share from the issue would be to the extent of Rs 580-583 crore, or half of the issue size.

The government has divested a stake of 10 per cent in Shipping Corporation, while the company has issued fresh equity equivalent to 10 per cent of the paid-up capital through the FPO.

The issue, which had opened on November 30, 2010 and closed on December 3, 2010, received a strong response as the offer was lapped up by the investors with applications received for 4.63 times of the offer size.

SCI FPO was subscribed 4.92 times, as per NSE website. The qualified institutional investors' (QIBs) reserved portion was subscribed 4.19 times, retail 6.56 times and non-institutional investors 3.67 times. The issue has received bids for more than 41.6 crore equity shares as against issue size of 8,46,90,730 shares.

Shipping Corporation of India plans to invest the money on expansion that includes its proposed entry into the ports and terminal management business in a joint venture with a global company.

The company has appointed SBI Caps, IDFC Capital and ICICI Securities as the Book Running Lead Managers for the issue in August.

Meanwhile Shipping Corporation plans to invest about $1 billion every year in capital expenditure over the next three years, according to S. Hajara, chairman and managing director of the company.

Moreover, the company is seeking multiple tie-ups with both oil and gas and steel companies in an effort to diversify its operations. It is in negotiations with Oil and Natural Gas Corporation Ltd (ONGC) as well as Indian Oil Corporation Ltd (IOC) and Steel Authority of India Ltd (SAIL) for joint ventures that will help it augment its fleet.

The shares of SCI are currently trading at Rs 144, down by 0.31% at 12.49 PM on BSE. The scrip touched a high of Rs 145.70 and a low of Rs 143.50 till now. The total traded volume of the scrip on BSE so far stood at 0.47 lakh.