According to market sources, Openheimer has acquired around 12 lakh shares in the country's largest private sector shipping concern, promoted by the Ruias. Morgan Stanley has been trailing behind, they confirmed.

Analysts attribute this renewed interest in Essar Shipping to its recent restructuring exercise. The company, which has 36 ships valued at $345 million and a total capacity 15.2 lakh dwt, accounting for around 14 per cent of India's shipping fleet, has changed its focus from pure shipping to end-to-end sea logistics solutions for energy transportation and coastal intra-Asian transportation. It is now one of the leading owners and operators of crude tankers in the world.

The price of Essar Shipping's shares reached a 52-week high of Rs 14 on February 9, against the 52-week low of Rs 3. Its share price has increased by 150 per cent since June 2000. During the past week, it was traded at a price of around Rs 11.30 and the average turnover per day was around 600,000. Last Friday, 304,608 shares were traded on the BSE alone. For the nine months up to December 31, 2000, earnings per share were Rs 2.57 as against Rs 0.72 for the corresponding period last year. Of its 19.68 crore shares, 58 per cent (or 11.3 crore) are held by the Ruias and 15 per cent (2.9 crore) by institutional investors. The market float is around 5.4 crore shares.

The net asset value of the company was $316 million as on December 31, 2000, that is $1.60 per share. Essar Shipping spokesman Sangram Mohanti claimed that the shareholders were seeing value in the company because of the restructuring exercise and the refocusing of its business to sea logistics rather than traditional shipping. However, he refused to elaborate.

The company, with most vessels on international charters, earning foreign exchange amounting to three-fourths of its total revenue, is moving upwards in the value chain by providing integrated transport logistics solutions through a five-prong plan. First, it increased energy transportation using its Suezmax tankers, Capesize vessels and liquefied nitrogen gas vessels.

Second, it took up integrated coastal transportation through Handymax/ Handysize bulk carriers, product tankers, mini-bulk carriers, offshore vessels, tugs and barges. Third, by promoting a crude oil and product terminal through its wholly owned subsidiary, Vadinar Oil Terminal Ltd (VOTL), at Jamnagar in Gujarat. VOTL is providing terminal/storage facilities for crude products and chemicals. Fourth, by setting up and operating shippingstop.com, an international shipping exchange for its clients' transportation needs.

And fifth, by entering the LNG segment. Essar Shipping has invested in LNG transportation via a 50:50 venture with Malaysia International Shipping Corp Bhd, one of the world's largest LNG tanker operators and a subsidiary of Petronas.

Moreover, Essar is expected to perform better during the current fiscal thanks to the restructuring. Its net profit increased by 463 per cent in Q3 this fiscal from that in the same period a year ago. It reported a net profit of Rs 50.54 crore for the nine months to Dec 31, 2000, and a cash profit of Rs 105.89 crore on a total income of Rs 311.63 crore. The earnings amounted to Rs 316.92 crore. The earning before interest, depreciation, taxation and amortisation in these9 months were Rs 151.62 crore as compared with Rs 113.86 crore in the year-ago period.