Shipping Corporation of India gained ground in the morning trades following reports that the government has called for fresh expression of interest for the divestment of 51% government stake in the state-run shipping major.

The scrip, on the reports surged 2.63% to Rs 72.25 by 9:56 IST on BSE. The scrip notched up volumes of 26,318 shares on BSE by then. Between 28 March and 6 May 2003, Shipping Corporation of India had risen 40% to Rs 70.40 from Rs 50.20, indicating that disinvestment expectations were already running high in the counter.

Meanwhile reports reveal that the interested parties should have a net worth of Rs 1,000 crore (Rs 10 billion). And fill in the bids for Shipping Corporation till 6 June 2003. This is the second attempt by the government to sell 51% stake of SCI. Earlier, the net worth criterion was Rs 800 crore (Rs 8 billion).

In its earlier bid to privatise the shipping major, the government did not receive a good response from international companies, mainly because of the 25 per cent cap on foreign direct investment. In the last lap of SCI privatisation, only two Indian companies were left, Essar Shipping and Sterlite.

So in April 2003, the Cabinet Committee on Disinvestment met with the aim of liberalising bidding guidelines covering SCI's divestment. The new guidelines were being set to garner interest from foreign shipping companies in the divestment process of SCI. In fact, the CCD has now decided that foreign companies can acquire the total 51% stake being put on the block in SCI compared to the earlier 25% cap on them.

The government holds 80% stake in SCI, of which it plans to offload 51%. 3% stake will be sold to employees of SCI.

Meanwhile the advisor, the Lazard-SBI Caps consortium, has been retained for SCI privatisation. Post-privatisation, the public sector oil companies will continue to give preferential treatment to SCI for crude movement for the first two years

SCI is India's largest shipping company. It operates in two segments - the liner segment and the bulk segment. The liner segment includes break-bulk and container transport. The bulk segment covers tankers (both crude and product), dry bulk carriers, gas carriers and phosphoric acid carriers. The government only recently approved the sale of SCI's 20% stake in its liquefied natural gas venture Greenfield Holding Company to Japanese partner Mitsui.

For the quarter ended 31 December 2002, the company's net profit more than doubled to Rs 76.22 crore on total income of Rs 614.16 crore (Rs 6.14 billion).