Shipping Corp Strategic Sale Set to Sail After Months of Delay
The strategic sale of Shipping Corporation of India Ltd. (SCI) is likely to finally take off with no further delay now that it has got the approval on stamp duty waiver from Maharashtra and the general elections are over.
Shipping Corporation Of IndiaStrategic SaleDisinvestmentMinistry Of Ports Shipping And WaterwaysDipamReal Estate MaharashtraJun 13, 2024
The stamp duty waiver of around Rs 300 crore, if not granted, would have been a major hitch. The Maharashtra cabinet has already given a stamp duty exemption on this demerger. SCI building in Maharashtra is now with its demerged entity, Shipping corporation of India Land and Assets Limited (SCILAL).
Also, the listing of SCILAL on March 19 has paved the way for financial bids to be invited for the strategic sale of Shipping Corp. The next step now is for the government to invite financial bids for the strategic sale. The sale is expected to fetch Rs 3,000 crore approximately to the government exchequer.
SCILAL was formed in November 2021 to hold the non-core assets of SCI, which falls under the Ministry of Ports, Shipping and Waterways. The government hived off the real estate assets of SCI — Shipping House, a 19-storey building, and the Maritime Training Institute, both in Mumbai. Thus, all identified non-core assets, real estate properties, buildings, non-shipping related assets, are now transferred to SCILAL.
A critical aspect of the sale is the demerger of SCI’s non-core assets to ensure that the core shipping business is sold separately, making it more attractive to potential buyers.
The demerger of SCI and SCILAL into separate entities was approved by the Ministry of Corporate Affairs in February 2023 but it has since faced multiple delays. The Union Cabinet had given in-principle approval for the strategic sale of SCI way back in November 2020. In December 2020, The Finance Ministry’s Department of Investment and Public Asset Management (DIPAM), invited expressions of interest for the disinvestment of the government’s entire 63.75 percent stake in SCI.
SCI has a fleet strength of 70 vessels and it is the largest Indian shipping company in India, catering to overseas and coastal transportation of goods.
Shipping Corporation of India Ltd. (SCI) is the largest Indian shipping company in India, catering to overseas and coastal transportation of goods. It falls under the Ministry of Ports, Shipping and Waterways.
The Ministry of Corporate Affairs is responsible for the administration of the Companies Act, which deals with the incorporation, regulation, and winding up of companies. The Department of Investment and Public Asset Management (DIPAM) is responsible for the disinvestment of government stakes in public sector undertakings.
Frequently Asked Questions
What is the expected value of the strategic sale of Shipping Corporation of India?
The sale is expected to fetch Rs 3,000 crore approximately to the government exchequer.
What is the current fleet strength of Shipping Corporation of India?
SCI has a fleet strength of 70 vessels.
What is the purpose of forming SCILAL?
SCILAL was formed to hold the non-core assets of SCI.
When was the in-principle approval given for the strategic sale of SCI?
The Union Cabinet had given in-principle approval for the strategic sale of SCI way back in November 2020.
What is the percentage of government stake in SCI that is up for disinvestment?
The government is looking to disinvest its entire 63.75 percent stake in SCI.
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