The company has fixed a price band of ₹240-252 per share for its IPO, where investors can bid for a minimum of 58 shares in one lot and in multiples thereof.
Shares of Shreeji Shipping are trading at a 12% premium to its issue price of ₹252 in the grey market, an unofficial ecosystem where shares start trading before the allotment in the IPO and continue till the listing day. Most investors track the grey market premium (GMP) to get an idea of the listing price.
Should you subscribe?
SBI Securities wrote in its note that Shreeji Shipping is a prominent player in the domestic integrated shipping and logistic solution provider industry with established cargo handling operations for Dry Bulk Cargo. At present, the company operates a fleet of 83 vessels and 376 earthmoving equipment.
Going ahead, the company will use the proceeds from the issue to acquire Dry Bulk Carrier in the “Supramax” category, further strengthening its fleet size. The company does not have any listed like-to-like peers in India.
Hence, the brokerage has recommended investors to ‘Subscribe’ to the issue with a long-term investment horizon at the cut-off price.
At the upper end of the price band, the company is valuing at P/E of 28.5x to its FY25 earnings, with EV/EBITDA of 21.4x and market cap of ₹4,105.5 crore post issue of equity shares. Anand Rathi believes that the IPO is fully priced and recommended a ‘Subscribe-long term’ rating to the IPO.
Shreeji Shipping Global anchor book
Ahead of the IPO opening, Shreeji Shipping Global mobilised more than ₹123 crore from anchor investors.
Those who participated in the anchor round included Bank of India Mutual Fund (MF), Morgan Stanley Asia (Singapore) Pte, BNP Paribas Financial Market — ODI, Aarth AIF Growth Fund, Viney Growth Fund, Khandelwal Finance, Golden Equity Fund Series I, SB Opportunities Fund II, Invicta Continuum Fund I, and Rajasthan Global Securities.
Shreeji Shipping Global’s IPO is entirely a fresh issue of 1.63 crore equity shares with no offer for sale (OFS) component.
At the upper end of the price band, the company is expected to garner ₹411 crore through the public issue.
Shreeji Shipping Global IPO objective
The company is planning to use ₹251.2 crore out of the IPO proceeds for acquisition of dry bulk carriers in the supramax category in the secondary market, and ₹23 crore for repaying debt.
Company overview
Shreeji Shipping Global is a provider of shipping and logistic solution for dry bulk cargos, and operates at various ports and jetties in India & Sri Lanka. The flagship company of Jamnagar-based Shreeji Group primarily focuses on non-major ports and jetties, particularly along the west coast of India.
According to a D&B Report, cargo handled at ports in the country is expected to grow at an annual rate of 10.80% to 2,849 MMTs by FY30 from 1,540 million metric tons (MMTs) in FY24.
Ports in Gujarat are set to see even faster growth, with cargo expected to rise to 720 MMTs by FY30 from 317.20 MMTs in FY24, representing a 17.50 per cent annual growth rate.
India has a long coastline with 12 major ports and 217 minor ports. Among these, 78 non-major ports handle cargo, while others are used for fishing.
Book running lead managers
Beeline Capital Advisors and Elara Capital (India) are the book-running lead managers to Shreeji Shipping’s public issue, while Bigshare Services is the registrar.
The allotment for the Shreeji Shipping Global IPO is expected to be finalised on August 22. Shares of the company are slated to begin trading on the exchanges from August 26.
