The Shipping Corporation of India Ltd is planning to raise Rs 1,184 crore through the follow-on public offer (FPO) that is opening for subscription tomorrow. The company has fixed a price band at Rs 135-140 per share for the FPO. The FPO comprises a fresh issue of 42,345,365 equity shares and an 'offer for sale' of 42,345,365 equity shares by the government. The issue will open for subscription on November 30 and close on December 2 for Qualified Institutional Buyers (QIB) and December 3 for other bidders. "The government will get Rs 592 crore through 10 per cent divestment and the company will get Rs 592 crore through issue of fresh shares,which will be used to fund its vessel acquisition plans," Chairman and Managing Director of the company S Hajara told reporters here. "We plan to acquire 62 vessels in the 11th Five Year Plan. We have already ordered 32 vessels and will place orders for 30 more vessels by end of March 2012," Hajara said. SCI has about 35 per cent share of Indian flagged tonnage as of June 30,2010. The company owned a fleet of 74 vessels of 5.11 million Dead Weight Tonnage (DWT) as on September 30. The ships being acquired by SCI would be predominantly used for catering to import/export trade of India. Though,some of the vessels would also participate in global trade depending on opportunities available,he said. The additional vessels the company has ordered are expected to allow it to increase its total Dead Weight Tonnage (DWT) from 5.11 million to 6.84 million. DWT is the total weight of the ship,including the cargo,crew and fuel. SCI plans to take its capacity to 10 million DWT by acquiring vessels in the next six years. Our objective is to maintain our dominant market position in the Indian shipping industry with a focus on high growth segments,Hajara said. SCI intends to partner with companies that would enhance its business,fleet or profitability when suitable opportunities arise. We intend to focus on entering into consortia arrangements in the container segment and to pursue highly capital intensive segments,such as LNG transportation,he said. Hajara pointed out that the company plans to expand and further develop its container and break-bulk services which offers lot of potential. Hajara said shipping rates are likely to remain under pressure till the end of calendar year 2011,while rates in the container segment will hold firm.
