Shipping Corporation of India’s shares were in the green on Wednesday after the company announced the record date for its demerger. At 03:15 PM, the company’s shares were trading at 138.40 apiece.
In an exchange filing, the company said that it has fixed March 31, 2023, as the record date for ascertaining the list of eligible shareholders of the company for the allotment of equity shares by Shipping Corporation of India Land and Assets Limited (SCILAL).
Shipping Corporation of India had announced the demerger of its land and assets in the ratio of 1:1. Thus if an investor has 100 shares of Shipping Corporation of India, they will get an equal amount or 100 shares of SCILAL. However, the share price will be adjusted due to the merger.
The demerger is aimed at facilitating the smooth divestment plan of the Government in regard to the Shipping Corporation of India. The Government of India is considering divesting its equity stake in the company along with the transfer of management control of the company.
The board of Shipping Corporation of India in August 2021 had cleared a demerger scheme for hiving off the identified non-core assets and incorporated SCILAL in November 2021, for holding such assets of the PSU company.
Shipping Corporation of India is a small-cap company with a market capitalization of ₹ 6,374 crores. It has a return on equity of 10.02% and an ideal debt-to-equity ratio of 0.31. Its shares were trading at a price-to-earnings ratio of 9.51, which is significantly higher than the industry average of 1.38, indicating that the stock might be overvalued as compared to its peers.
The company’s shares have given multibagger returns of 112.43% in the past five years as its share price increased from ₹ 65.15 apiece to the current levels. Therefore, if an investor would have invested ₹ 1 lakh in the company’s shares five years ago, the value of their holdings would have been ₹ 2.12 lakhs today!
Written by Simran Bafna
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