Cabinet nod for Shipping Corp FPO likely next week

The government will divest 10 per cent of its stake in Shipping Corporation of India (SCI) and the company will raise the same amount of fresh equity.

"The proposal to grant approval to the follow-on offer of SCI may be taken up next week," a Shipping Ministry official told PTI.

The government currently holds an 80.12 per cent stake in SCI.

At current market prices, SCI is likely to raise Rs 1,400 crore from the market, of which half the amount would go to the government.

The market capitalisation of SCI stands at Rs 7,075 crore.

SCI is likely to utilise the proceeds from the follow-on offer for further acquisitions. At present, SCI owns 76 ships of 5.1 million DWT (deadweight tonnage) and has interests in all segments of shipping trade.

In addition, it mans and manages 60 vessels of 0.2 million tonnes DWT, which is the total weight of the ship, including the cargo, crew, fuel, etc.

The SCI stake sale is part of the government's plans to raise up to Rs 40,000 crore through disinvestment this fiscal.

Last week, the CCEA gave its nod for 10 per cent disinvestment in Manganese Ore India Ltd through an initial public offer (IPO) and share sale of 5 per cent each by the Madhya Pradesh and Maharashtra governments.

The government has an 81.57 per cent participating interest in MOIL, the Maharashtra government has a 9.62 per cent stake and the Madhya Pradesh government has 8.81 per cent.

Following the stake sale, the Centre's equity in the company will come down to 71.57 per cent, while that of Maharashtra and Madhya Pradesh will be 4.62 per cent and 3.81 per cent, respectively.