This Govt-Owned Stock Is Surging 9% On ₹3,000 Cr Divestment Plans

Shares of Shipping Corporation of India shot up on Wednesday after the government-owned firm was reportedly set to be divested.

What Happened: The strategic sale of Shipping Corporation of India is poised to advance without further delays, following the approval of a stamp duty waiver from Maharashtra and the conclusion of the general elections, Moneycontrol reported, citing a senior government official.

SCI is India's largest shipping company with a fleet of 70 vessels and provides overseas and coastal transportation of goods.

The official noted that the disinvestment of the Shipping Corporation of India had experienced delays due to the elections. However, the Maharashtra cabinet’s recent approval of a stamp duty exemption, valued at around ₹300 crore, has removed a significant hurdle. The SCI building in Maharashtra has now been transferred to its demerged entity, Shipping Corporation of India Land and Assets Limited (SCILAL).

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Long Time Coming: The listing of SCILAL on March 19 has enabled the government to invite financial bids for the strategic sale of the Shipping Corporation of India, expected to generate around ₹3,000 crore for the government exchequer. SCILAL, established in November 2021, holds the Shipping Corporation of India’s non-core assets, including the Shipping House and the Maritime Training Institute in Mumbai.

The separation of Shipping Corporation of India's non-core assets ensures that the core shipping business can be sold independently, making it more appealing to potential buyers. This demerger, approved by the Ministry of Corporate Affairs in February 2023, faced several delays but is now reportedly progressing smoothly.

The Union Cabinet initially approved the strategic sale of Shipping Corporation of India in November 2020. Subsequently, in December 2020, the Finance Ministry's Department of Investment and Public Asset Management (DIPAM) invited expressions of interest for disinvesting the government's entire 63.75% stake in the Shipping Corporation of India.

Price Action: Shipping Corporation of India’s share price was trading 6.4% at ₹261.69 in morning trade on Wednesday.

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