Essar Shipping in demand on fund raising plan

Essar Shipping in demand on fund raising plan

Essar Shipping jumped 3.76% to Rs 226 at 10:49 IST on BSE on reports the company is raising around $1 billion through a mix of equity and quasi-equity instruments.

Meanwhile, the BSE Sensex was up 11 points, or 0.07%, to 18672.56.

On BSE, 1.76 lakh shares of the scrip were traded. The stock had an average daily volume of 11.35 lakh shares on BSE in past one quarter.

The scrip had touched a high of Rs 227.85 and a low of Rs 215 so far during the day. The stock had hit a 52-week high of Rs 244.05 on 21 January 2008 and a 52-week low of Rs 33.20 on 18 May 2007.

The scrip had outperformed the market in the one month to 4 February 2008, adding 13.20% as against the Sensex's 9.80% decline. It had also outperformed the market in the past three months, soaring 448.61% against the Sensex's 3.82% slide.

The mid-cap shipping firm has an equity capital of Rs 426.08 crore. Face value per share is Rs 10.

At the current price of Rs 226, the scrip trades at a PE multiple of 55.25, based on Q3 December 2007 annualised EPS of Rs 4.09.

According to reports, the fund raising plan is aimed at bringing down the company’s debt, currently pegged at around $2.3 billion on a consolidated basis.

Majority of the funds will be raised as equity, preferably through a qualified institutional placement. Many foreign investors have lined up to pick up equity in the company, the reports suggested.

Essar Shipping’s net profit rose 0.2% to Rs 43.61 crore on 34.9% decline in sales to Rs 154.54 crore in Q3 December 2007 over Q3 December 2006.

Essar Shipping owns and operates very large crude carriers (VLCCs), tankers and bulk carriers. It currently has total fleet of 28 vessels with 1.5 million dead weght tonnage (DWT) capacity.