Financial Daily from THE HINDU group of publications
Friday, Jul 19, 2002
Logistics - Shipping
Rough voyage for Shipping Corpn
KOLKATA, July 18
THE Shipping Corporation of India (SCI) scrip is witnessing the rough and tumble of the divestment high sea. According to market players, the stock is going through price fluctuations owing to uncertainties over the fixation of reserve price, expected bid valuation and the open offer price.
The stock today closed around Rs 88 with a gain of over 4 per cent and the total volumes in the two major bourses were over 14 lakh shares.
"The scrip reached its recent peak of over Rs 100 from a level of Rs 39 before the divestment measures for the company were set in motion. The trigger was the net asset value, which is placed at around Rs 120 per share. However, it could not sustain at higher levels as the apprehension of much lower reserve price crept in last month. In view of uncertainties, the market is testing out different price levels," said Mr Ajit Day of Dayco Securities.
According to market analysts, after the first week of June, the SCI scrip began to slide. The scrip had recorded a combined traded quantity at the Bombay Stock Exchange and National Stock Exchange of over 1 crore at a closing price of Rs 101 on June 5.
The recent ascent and descent of the stock along with volumes indicate changing valuation perception.
In its declining journey, it made a lower top at Rs 90 on July 7 with a combined volume of 19 lakh shares at the two top exchanges.
According to Mr John Band, an independent analyst, the interest of the portfolio investors waned in the counter following the Government decision that the foreign partner of a local bidder should have a holding of less than the crucial 26 per cent.
Shipping analysts pointed out that many vessels in the SCI fleet were old enough to depress the asset valuation. The book value of the scrip, according to them, would be around Rs 85 per share.
The brokers felt that since the open offer price will be pegged higher than the reserve price, the market will tend to reach around the perceived open offer price with in a range between Rs 80 and Rs 90.
The current EPS of the SCI stock is Rs 8.56.
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