State-run Shipping Corporation of India (SCI) is looking to spend around Rs 13,500 crore on expansion activities over the next three years.
"We have chalked out our growth plans and will invest Rs 4,500 crore every year for the next three years," SCI Chairman and Managing Director S Hajara said on the sidelines of a conference here.
The capex will be financed through a mix of internal accruals and debt, Hajara said, adding that the company's recently concluded follow-on public offer was over-subscribed five times and mopped up around Rs 1,200 crore.
The offer received bids for 41.64 crore shares, though just 8.46 crore shares were on offer. The issue closed on Friday (December 3).
However, the FPO proceeds will be insufficient to cover the massive Rs 13,500 crore investment plan drawn up by SCI for the next three years and the company will largely have to rely on funding from banks.
"The money raised through the FPO was of very small part. Our debt is a bigger component," Hajara said.
Commenting on the shipping industry, Hajara said the Indian shipping industry has a bright future as Indian flag gross tonnage is expected to double to 20 GT from 10 GT at present over the next six to seven years.
However, tonnage growth is not keeping pace with India's export-import (EXIM) trade, he said.
Indian shipping lines' share of the country's EXIM trade is estimated at 8 per cent at present, compared to around 40 per cent in the 1980s.
Growth will happen only if policymakers take proactive measures in terms of the fiscal regime as well as commercial issues, Hajara said.
"On behalf of the Indian National Ship Owners' Association, we have made a presentation to the government. We have expressed our views on how the government can give an impetus to the shipping industry. We are hoping for a positive response," he said.
India also has a huge potential to grow in the ship- building space, Hajara said.
He noted that the ship-building industry of neighbouring China has grown by leaps and bounds to overtake Japan and become the second largest ship builder after South Korea. In this light, with strong engineering skills and comparatively cheaper manpower, India has tremendous potential in the global ship-building arena, he said.
