Govt fixes Shipping Corp issue price at Rs 140 | business | Hindustan Times
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Govt fixes Shipping Corp issue price at Rs 140

business Updated: Dec 06, 2010 20:45 IST

The government on Monday fixed the issue price of state-owned Shipping Corporation follow-on offer at Rs 140 a share that will help raise around Rs 1,160 crore, a part of which would be used to fund the company's entry into ports business.

"The government has fixed Shipping Corporation's FPO issue price at Rs 140 per share -- the upper end of the price band," a source familiar with the development said.

The government had fixed the price band of SCI at Rs 135 to Rs 140.

He said the government's share from the issue would be to the tune of Rs 580-583 crore, or half of the issue size.

The government has diluted 10 per cent stake in Shipping Corporation, the largest Indian shipping company that accounts for a third of the country's tonnage, while the company has issued fresh equity equivalent to 10 per cent of the paid-up capital through the FPO.

The issue, which opened on November 30 and closed on December 3, was lapped up by investors with applications received for 4.63 times of the offer size.

Shipping Corporation's shares today closed at Rs 144.45 a piece on BSE, up 0.49 per cent from the previous close.

In October, the government had approved the sale of 10 per cent of its stake, or 42 million shares, in SCI and also allowed the company to issue fresh equity.

Following the stake sale, the government's holding in the company will come down to 63.75 per cent from 80.12 per cent at present.

Shipping Corp 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.

The company appointed SBI Caps, IDFC Capital and ICICI Securities as the Book Running Lead Managers for the issue in August.

So far this fiscal, divestment in Coal India, Power Grid Corporation, Satluj Jal Vidyut Nigam and Engineers India has fetched about Rs 21,000—22,000 crore for the government.

Manganese Ore India Limited would be listed on bourses on December 15.

The government has estimated to raise Rs 40,000 crore through disinvestment in the current fiscal, up from around Rs 25,000 crore in 2009-10.