The government today fixed a price band of Rs 135-140 per share for Shipping Corporation's follow-on public offer (FPO), which will raise about Rs 1,200 crore if fully subscribed at the upper level of the band.
"Empowered Group of Ministers (EGoM) has fixed a price band of Rs 135-140 a share for the FPO of Shipping Corporation," G K Vasan, Shipping Minister said.
The government will dilute 10 per cent stake in Shipping Corporation while the company would issue fresh equity to the tune of 10 per cent of the paid-up capital through the FPO, which opens on November 30 and closes on December 3.
However, it will close a day early for institutional investors on December 2.
The band is lower by Rs 31-36 than the company's 52-week average of Rs 171 on the Bombay Stock Exchange (BSE). This is also less than the share's closing price at Rs 145.40 a piece on the BSE today, down 0.89 per cent from the previous close.
Later, talking to reporters, Shipping Corporation of India Chairman S Hazara said that the company and the government would raise around Rs 550 crore each through the FPO. (The issue would raise Rs 1,340 crore at lower level.)
In October, the government had approved the sale of 10 per cent of its stake, or 42 million shares in Shipping Corporation of India and also allowed the company to issue fresh equity to the tune of 10 per cent of the paid up capital.
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.
Retail investors and employees will get five per cent discount on the issue price of shares and a 0.5 per cent stake has also been reserved for employees under the proposed share sale.
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.
The initial public offer of Manganese Ore India Limited (MOIL) opened today and would close on December 1.
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.
