Shipping Corporation of India - FPO Note (Keynote Capitals)

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Issue Highlights

Price Band                                           : Rs 135 – 140per share                                    

Minimum Bid Lot Size                         : 50 Equity Share

IPO open during                                  : Nov. 30 – Dec. 3, 2010 (for QIBs issue closes on Dec. 2, 2010)

Book Running Lead Manager               : SBI Capital Markets, IDFC Capital, and ICICI Securities

To list on                                             : NSE & BSE

PE                                                        : 14.8x (based on base price)*

                                                            : 15.3x (based on cap price)*

Market Cap post-listing                        : Rs6521Cr or $1426mn (based on the cap price)

Market Cap of Free Float                      : Rs2364Cr or $517mn (based on the cap price)

* based on FY10 EPS.

IPO of 84.69mn equity shares of Rs10/- each, aggregating to Rs1185.7Cr or $259.28mn (at the cap price) consisting of a fresh issue of 42.35mn shares  aggregating to Rs592.84Cr (at the cap price) and an offer for sale of 42.35mn shares aggregating to Rs592.84Cr (at the cap price) by Government of India.

Executive Summery

•     Shipping Corporation of India Ltd. (SCI) is one of the largest shipping companies in India in terms of Indian flagged tonnage with approx. 35% share of Indian flagged tonnage as of June 30, 2010.

•     As of October 31, 2010, SCI’s fleet included 18 dry bulk carriers of 781,777 DWT, four VLCCs of 1,274,175 DWT, 18 crude oil tankers of 2,081,003 DWT, 15 product tankers of 877,726 DWT, 10 offshore supply vessels of 17,904 DWT, five container vessels of 202,413 DWT, three phosphoric acid and chemical carriers of 99,174 DWT, two gas carriers of 35,202 DWT and two passenger-cum-cargo vessels of 5,303 DWT.

•     SCI’s customers comprise of Government agencies, large industrial concerns, international oil companies and public sector undertakings. The company has also entered into six strategic joint ventures.

•     The Government has awarded SCI with a ‘Navratna’ status in August 2008 leading to enhanced delegation of powers to the Board, including, the areas of capital investment, formation of joint venture, and opening of new offices.

•     SCI is one of India’s leading shipping companies with a long established reputation and strong customer relationships with various public sector undertakings and the Government, among others.

•     SCI owns a variety of modern and technologically advanced vessels, which include bulk carriers, VLCCs, crude oil tankers, product tankers, container vessels, passenger-cum-cargo vessels, phosphoric acid and chemical carriers, LPG and ammonia carriers, and offshore supply vessels.

•     SCI is a key beneficiary of India’s economic growth. Capability to grow fleet size positions helps the company to take advantage of attractive asset prices and anticipated growth in the shipping industry.

•     As of September 30, 2010, SCI has Rs2310.34Cr cash and cash equivalents on its balance sheet with a debt to equity ratio of 0.55x and a current ratio of 2.96x.