Govt seeks bids for its 63.75% stake in SCI
NEW DELHI: The finance ministry on Tuesday began the process of divesting the government’s entire 63.75% stake in Shipping Corporation of India (SCI) along with management control by inviting expressions of interest from potential bidders.
At SCI’s current market price, the government can raise around ₹2,500 crore from the stake sale.
RBSA Capital Advisers will be the transaction adviser for the divestment process and bids can be submitted until February 13.
SCI owns and operates about a third of India’s shipping tonnage, catering to both domestic and international operations. It handles transportation of goods and passengers with its own fleet, including bulk carriers, crude oil tankers, LPG carriers, product tankers, container vessels, passenger-cum-cargo vessels and offshore supply vessels.
In 1992, the government divested 18.51% of its stake in SCI in favour of financial institutions, mutual funds and banks. Later that year, the company was listed on the domestic stock exchanges. In 1994, the government divested a further 1.37% of its holding in SCI.
In 2000, the company was declared a miniratna and later upgraded to a navratna in 2008, thus enhancing SCI’s powers for capital investment. In 2010, the government offloaded another 16.37% stake in the company, reducing its stake to 63.75%. SCI earned a net profit of ₹336.5 crore in FY20 on total revenue of ₹4,668 crore.
Listing out the terms of the divestment process, the department of investment and public asset management (DIPAM) said interested bidders should have positive Ebitda (earnings before interest, tax, depreciation and amortization) in three of the previous five years and a minimum net worth of ₹2,000 crore. In case of a consortium, the lead member should have a minimum net worth of ₹1,001 crore with at least 50.01% equity in the consortium. The ultimate beneficial owner for any bidder should not be the same as that of any other bidder or of any consortium member, according to DIPAM.
The stake sale of SCI forms part of the government’s disinvestment target of ₹2.1 lakh crore for FY21, including the privatization of Air India and Bharat Petroleum Corporation Ltd. So far this year, the government has garnered ₹12,225 crore through minority stake sales and the IPO of Mazagon Dock Shipbuilders Ltd.