PSU stock surges to hit 52-week high on demerger update

Disinvestment-bound SCI recently informed in an exchange filing that “the Final hearing before the Ministry of Corporate Affairs at New Delhi for obtaining sanction on the Scheme of Arrangement for Demerger is fixed on Thursday, 29th December 2022 as per the directives of MCA issued during the hearing held on 16th December 2022.”

Shipping Corporation of India Ltd (SCI), a government corporation is the largest Indian shipping company which operates and manages vessels servicing national and international lines and the company is said to be the only Indian firm engaged in transportation of LNG. The Shipping Corporation of India was established on October 2nd, 1961, by the amalgamation of Eastern Shipping Corporation and Western Shipping Corporation. The PSU stock has gained about 3% this year.

For the quarter ended September 2022 (Q2), SCI reported a 49% decline in its consolidated net profit to ₹124 crore. The shipping company had reported a net profit of ₹243 crore in the corresponding quarter of the previous fiscal.

Its total income rose to ₹1,458 crore during the quarter under review from ₹1,296 crore in the year-ago period, whereas, total expenses also increased to ₹1,336 crore from ₹997 crore earlier. It said the proposed strategic disinvestment of SCI is being handled by the Department of Investment and Public Asset Management (DIPAM) with the engagement of necessary advisors.

The government had issued the preliminary information memorandum for SCI divestment in November 2020 and called for expressions of interest (E. However, the covid-19 pandemic slowed most disinvestments being undertaken by the government over 2020 and 2021. The government will invite financial bids only after the demerger process is complete.