Shipping Corp FPO subscribed 2.32 times

Gets bids for 19.68 crore shares

The follow-on public offer (FPO) of state-run Shipping Corporation of India (SCI) was subscribed 2.32 times on the third day of bidding for the issue today, 2 December 2010. The FPO got bids for 19.68 crore shares compared with 8.46 crore shares on offer. Bidding for the FPO by qualified institutional buyers ended today, 2 December 2010 while that for other category of investors ends on Friday, 3 December 2010.



The price band for the FPO is Rs 135-140 per share. Retail investors and employees will get 5% discount on the price discovered through the book-building route.

The government is diluting 10% stake in Shipping Corporation of India (SCI) through the FPO, which also includes issue of fresh equity by the company to the tune of 10% of the paid-up capital.

Following the stake sale, the government's holding in the company will come down to 63.75% from 80.12% at present. The size of the FPO is about Rs 1200 crore at the upper level of the price band.

SCI plans to invest the money on expansion, including its proposed entry into the ports and terminal management business in a joint venture with a global company.

SCI's FPO is a part of the government's plan to raise Rs 40000 crore through stake-sale in state-run firms in the fiscal year that ends in March 2011.

SCI is India's largest shipping company in terms of Indian flagged tonnage. Net profit soared 643.7% to Rs 250.63 crore on 3.7% increase in net sales to Rs 876.44 crore in Q2 September 2010 over Q2 September 2009.