SCI sails high

about 1 year ago
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Shipping Corporation of India (SCI) is right there among the top five gainers on the BSE since the opening bell today. Rising over 10% to hit an intraday high at Rs.99.28, volumes have jumped up almost 3.5x. Its 52-week high stands at Rs.151.30.

The buzz around the stock got louder since last week, when the Govt announced that will be inviting financial bids for the privatisation SCI in May.

The company managed to complete the requirement of separating its non-core assets before selling off Govt’s 63.75% stake.

Last month, after getting all the regulatory approvals, it successfully completed the spinoff. The demerged company, SCI Land Assets is now slated to get listed on or before 23rd April, which is essentially before the end of this week.

SCI had fixed 31st March,23, as the Record Date for allotment of Equity Shares in the ratio of 1 share for every 1 share held, in SCI Land Assets.  

Non-Core assets of SCI, being hived off to a new company, are seen having about 185 Residential Flats, (largely in Mumbai), coupled with 1.42 lakh sq ft of SCI House at Nariman Point, Mumbai. In addition, minimum Cash Balance of Rs. 1,000 crore is being earmarked as Non-Core Assets.

As explained in our Little Gems section, SCI is also holding about 48 acres of land at Powai, Mumbai, with Book Value of Rs. 2,390 crore (estimated NPV of over Rs. 7,500 cr.) of this land, as it has potential to develop about 1 cr sq feet residential and commercial space. In aggregate, value of Non-Core Assets are estimated at over Rs. 11,000 cr, resulting in NPV of Rs. 236 per share of Non-Core assets alone, being hived off.

SCI is the largest Indian shipping company, owning 59 vessels, including Bulk carriers, Crude oil tankers, Product tankers, Container vessels, LPG/ Ammonia carriers, Offshore Supply Vessels, while residual value of Core SCI may be seen quite low.

Our Editor, Mr.SP Tulsian, on 22nd March’23 had given a price target of Rs.147 in 3-months. He has advised buying to those who can respect time horizon of 6-8 months to reap full value and gains.

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