Shares of Shipping Corporation of India (SCI) gained about 16% to hit a fresh 52-week high of Rs 92.00 on the BSE, on the back of reports that the government has been advised to cut stake in the 'Navratna' public sector shipping company.
Shares of Shipping Corporation of India (SCI) gained about 16% to hit a fresh 52-week high of Rs 92.00 on the BSE, on the back of reports that the government has been advised to cut stake in the ‘Navratna’ public sector shipping company. NITI Aayog has recommended the government to initially cut 26 per cent stake in the company, and subsequently reduce its stake to 25 per cent, CNBC-TV18 reported quoting unnamed sources.
On 2 June, the core group of secretaries on disinvestment, headed by the cabinet secretary, discussed the proposal and has mandated the Shipping Ministry, to find out legal hassles, if any, in the process.
The NITI Aayog has drafted a recommendation which proposes to bring down government’s stake in the company, in multiple tranches, to 37.75 per cent from the current 63.75 per cent. The recommendation will soon be sent to Cabinet Committee on Economic Affairs. This sale could potentially earn about Rs 960 crore for the government.
The government should sell 26 per cent stake in SCI in the first round and subsequently, it should transfer management control, Niti Aayog draft said. In final stages, the draft advises the government to gradually keep selling its stake over a period of one year until it owns 25 per cent of the shipping company.
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The reason for the dilution of government stakes has also been cited in the recommendation. Niti Aayog said the government does not need to run SCI as the shipping industry is now competitive. SCI imports only a fraction of crude oil, NITI Aayog said, adding globally, private companies are involved in crude oil imports.
At 12:45 hour IST, the stock price was quoting at Rs 86.60, up Rs 7.25, or 9.14 per cent on the BSE. Other shipping stocks on the BSE, such as Great Eastern Shipping, Mercator, Chowgule Steamship, Essar Shipping and Seamac were all trading positive too.