The government has approved sale of 10 per cent equity in Shipping Corporation of India. The biggest domestic shipping company would also raise 10 per cent additional equity to fund its expansion plans.
The government holds 80.12 per cent stake in SCI. It will sell 42.3 million shares and the company will issue as many shares. The public offer will bring down government stake in the company to 63.75 per cent. “The time line is yet to be fixed. But it will happen in this financial year,” said S Hajara, chairman of SCI.
At current valuation, the issue is likely to raise Rs 1,400 crore. “The price band will be fixed by the empowered committee,” Hajara added. SCI, whose shares closed at Rs 168, up 0.45 per cent on the Bombay Stock Exchange today, owns 75 ships with a capacity of 5.10 million DWT (Dead Weightage Tonnage).
Retail investors and employees will get five per cent discount on the issue price. The government has also reserved 0.5 per cent of the issue size for employees of the company, said a statement issued after a meeting of the Cabinet Committee on Economic Affairs (CCEA). The government plans to raise Rs 40,000 crore this year through disinvestment. Experts say the market appetite for public issues is good, with the Sensex touching a 32-month high last week.
Bonanza for railway staff
In the highest-ever bonus payment to be made by Indian Railways, the Union Cabinet also approved productivity linked bonus (PLB) equivalent to 77 days’ wages for 2009-2010 for all eligible non-gazetted Railway employees. “The financial implication of payment of 77 days’ bonus to railway employees has been estimated at Rs 1,065.42 crore,” Soni said.“The decision would benefit about 12.92 lakh non-gazetted railway employees.” The wage calculation ceiling prescribed for payment of PLB to eligible employees is Rs 3,500 per month.
13 new central varsities
The Union Cabinet approved a plan to set up 13 new Central Universities and convert three state universities into Central Universities at an investment of Rs 3,000 crore during the 11th Plan Period. The 16 states — which do not have a central university at present but are slated to get one each in the 11th Plan — are Bihar, Jharkhand, Orissa, Madhya Pradesh, Chhattisgarh, Punjab, Haryana, Himachal Pradesh, Uttarakhand, Jammu & Kashmir, Karnataka, Kerala, Tamil Nadu, Gujarat, Rajasthan and Goa.
Quota for ITI extended
CCEA also approved continuation of a 30 per cent reservation quota of the requirement of Bharat Sanchar Nigam Ltd and Mahanagar Telephone Nigam Ltd for ITI Ltd for two years from September 21, 2010, for products manufactured by it, as well as on turnkey projects.