Shreeji Shipping
IPO Size: Rs. 411 cr, Entirely Fresh Issue
- For acquisition of vessels Rs. 251 cr
- Debt repayment Rs. 23 cr, of Rs. 256 cr total debt
Price band: Rs. 240-252 per share
M cap: Rs. 4,105 cr, implying 10% dilution
IPO Date: Tue 19th Aug to Thu 21st Aug 2025, Listing Tue 26th Aug 2025
Grey Market Premium (GMP): We are strongly against ‘grey market premium’ as it is an unofficial figure, against SEBI guidelines.
Jamnagar, Gujarat-based Shipping Company
Shreeji Shipping Global is a 30 year old shipping and logistic solution provider for dry bulk cargo, mainly coal, in India (85% of revenue) and Sri Lanka (15% of revenue). It has a fleet of 83 vessels (barges, mini bulk carriers, tug boats, floating cranes) and 370+ earthmoving equipment (material handling machines, excavators, pay loaders, tippers, trailers, tankers) for cargo handling, transportation and fleet chartering services.
Purchase of 2 Supermax Carriers
From the fresh issue proceeds, company plans to acquire 2 second-hand dry bulk carriers, in Supermax category, having remaining useful life of 9-12 years. Thus, Rs. 545 cr gross block as of 31.3.25, will increase by Rs. 251 cr by FY26-end.
But hardly 10% of Rs. 256 cr gross debt is being repaid from IPO proceeds.
Financials
Company’s revenue is linked to global shipping rates, which declined sharply in FY25, after surging to decade-high levels during covid. Thus, revenue is highly volatile, with FY25 revenue down 17% YoY to Rs. 608 cr, despite handling 14% YoY higher cargo volume of 15.7 MMT. FY25 PBT before exceptional items remaining flat YoY at Rs. 167 cr, with PAT reported at Rs. 141 cr and an EPS of Rs. 9.8.
Expensive Pricing
With post IPO m cap of Rs. 4,105 cr and an enterprise value of Rs. 4,223 cr, IPO is priced at a historic PE multiple of 29x. While volume growth can be expected FY27E onwards due to new vessel purchase, IPO valuation is still aggressive, as 85% of company’s business is from coal handling, where volume outlook is not bright, especially for H1FY26.
Also, larger peer The Great Eastern Shipping is ruling at a PE multiple of 7x, with a m cap of Rs. 13,900 cr and TTM PAT of Rs.2,000 cr, making Shreeji Shipping’s IPO pricing expensive.
At a macro level, shipping industry is highly cyclical, with 2024 being a boom year. The sector has historically never enjoyed premium multiples on the stock exchanges.
17th Aug 2025 at 09:58 pm