floor price is Rs.292 as per latest announcement on bse
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Interesting situation. Promoters already own 70% and their ex-employees who I guess are aligned to promoters objectives own another 3%+. Out of the remaining 27% , only 17% have to agree for the delisting to go through (to get to 90% shareholding). They have not given the indicative price yet but book value itself is around 370+ and with more ships getting deployed will increase as time goes by. Great time for the promoters to delist and hopefully they will give a fair exit around 1.1 to 1.2 times book value to the retail shareholders. The new SEBI guidelines mean the entire transaction has to go through in around 3 months!
Disc: Invested and added
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What are the scenarios if we do not offer our shares for delisting?
you will receive dividends or any other benefit given to shareholders but you may not able to sell your share if you don’t give your shares in delisting period of 1 year
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Prudent Equity, which collectively holds a block of about 10% equity stake in the company has advised its clients to bid at Rs 440 per share. The book value for the current financial year is expected to be about Rs 440 per share. We believe that Rs 440 is the fair price for shareholders to bid their shares during the bidding process
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IF DELISTING SUCCED THEN WE HAVE 1 YR TIME TO SURRENDER SHARE AT THAT TIME AND IF DELISTING NOT SUCCED THEN COMPANY WILL REVISED THE BID AT THAT TIME WE HAVE ANOTHER CHANCE TO BARGAIN WITH COMPANY SO WIN WIN SITUATION FOR RETAIL INVESTOR [quote=“abrarhh, post:89, topic:16903, full:true”]
What are the scenarios if we do not offer our shares for delisting?
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Anyone interested in this after delisting, it looks super cheap. One concern I see if delisting fails is that they dont pay much dividend although it is still small and growing.
I’m holding on to the share until I get a price too hard to pass which is approximately Rs 1000, and my reasons are simple.
- India has made a huge infrastructure upgrade, especially when it comes to ports, and much of those upgrades have been to containerized ports so the next to benefit would be the shipping companies.
- A significant proportion of India’s trade is with UAE and Singapore and if you observe Shreyas shipping’s routes are along these lines.
- If a manufacturing boom does takes place then all of that has to be moved on container ships and I don’t see another company operating in Indian waters with such capabilities.
- You can buy ships, but operational experience is invaluable so if an Adani or some other large logistics company wants to downward integrate then buying Shreyas is a great place to start.
- Since the promoters hold more than 70% of the stake a hostile takeover is not possible but taking it private indicates to me that they might already have an offer most probably from DP World but by all assumptions it’s more valuable in my opinion than it’s earnings.
- There are already some protectionist measures, but if anything like the Jones act is implemented then a company like SSL will be the biggest benefactor.
- Controlling maritime trade in the Indian ocean will gain more and more interest with current geopolitical tensions and would be of particular interest to India.
If defense stocks got all the attention last year, GE and SSL will get that next year in my opinion. So, I’m bracing for a huge win here.
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For first time, Recieved phone call from so called Shreyas representative to vote for the delisting resolution. She also offered help to cast vote instantaneously, though i refused. Any reason?
I’m holding on to the share until I get a price too hard to pass which is approximately Rs 1000 , and my reasons are simple.
Whatever your reasons if the delisting is approved which is If the vote for the delisting goes ahead and the promotors are happy with the price discovered in the reverse book-building process (90% threshold) that will follow, you do have not much choice.
You could hold on, but there won’t be a market to sell your shares in. You would be at the mercy of the promotors and hope that they pay out profits in the form of dividends.
- A significant proportion of India’s trade is with UAE and Singapore and if you observe Shreyas shipping’s routes are along these lines.
This is not correct. Shreyas’s container ships operate solely serve domestic ports providing container feedering (short sea shipping). They bulk vessels seem to serve a variety of routes.
- You can buy ships, but operational experience is invaluable so if an Adani or some other large logistics company wants to downward integrate then buying Shreyas is a great place to start.
They already have a close relationship with DP World which is competing with Adani.
I would love Rs 1,000 too, but other shipping stocks and even Indian shipping stocks are not commanding very high P/E or P/B multiples.
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The voting is electronic via your depository account. I presume she was going to walk you through the process.
Within 45 days from the board meeting, shareholders’ approval is to be sought by a special resolution through postal ballot and/ or e-voting. The special resolution can be acted upon only if the votes cast by the public shareholders in favour of the proposal are at least 2 times the number of votes cast by the public shareholders against it.
Shreyas needs a 2/3rd majority from public shareholders for the delisting to proceed. I think that is why they are chasing people. You should vote for/against or abstain based on what you think is in your best interests.
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If the delisting does go through then I don’t see a significant downside from the current price which is most likely to occur at a premium above the book value so at a minimum about Rs 400 might be on the table.
You are right much of the traffic is between, ports on the western coast and eastern coast but I do see SSL Brahmaputra frequently travelling between Arabian ports and Singapore ports with stopovers in Indian ports.
The fact that Indian shipping stocks are not commanding very high P/E or P/B multiples does not mean that they won’t command them. They are an opportunity precisely because they don’t right now and have every reason to do so.
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The Delisting offer is probably a double edged sword. If for any reason it fails, then the stock could see a sharp correction, with the container index having given up all its gains.
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It is also relevant to note that Shreyas is largely into Indian coastal shipping & is relatively unaffected by the the gyrations of the Howe Robinson Container Index.
Rajeev - previously you posted that the coastal shipping rates are different to global indices. Is that no longer the case?
@Deenar_Toraskar
Yes, when I initiated this thread in March 2018, I did believe that since the Co. was into coastal shipping, it was largely unaffected by the shipping index.
The mgt. though has repeated suggested that the decline in the container index has a bearing on the performance of the Co. As investors we would do well to be guided by the mgt. commentary. Attaching two recent such cases.
Investing is a dynamic exercise & our views are often influenced by what we learn as we go along, which is also how it should be. To my mind, the mgt. wants to de-list as it feels that the markets are not valuing the Co. fairly. Even when it was doing well, the valuations were ridiculous. It is always possible that they may decide to re-list at a later date at a time of their choosing or may list abroad.
I have also learned that it is pointless to remain invested in a de-listed Co. In times to come, the Co. mgt. is free to change the face value of the shares to 10,000 or even more & the shares held by the retail investors turn into odd lots. It is pointless to fight the mgt. of a Co. looking to de-list.
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Thank you. I presume the global container index will always have some impact, like fewer feeder opportunities.
I agree with you on not being invested in a de-listed company. There are enough other opportunities around where promotors want external shareholder capital.
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Shreyas has received the shareholder’s approval for the delisting process. Nearly half mainly smallholders voted against. The numbers are public shareholding only (excluding promotors)
Vote, # of shareholders, # of shares, percentage
Assent, 390, 1637966, 80.97
Dissent, 378, 384987, 19.03
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Can we look forward to better price at bourses?
TW has to reach 90% target from current 70% approx within the available time span for delisting to take effect. Are there short term opportunities if the last few days market behaviour is any indicator?
Delisting can be a double edged sword. If it goes through, the investors will make decent money. The problem is that if it doesn’t go through then the share price falls substantially below the indicated price, which in this case is 338. More often than not, in recent times, delisting has failed as Companies have failed to garner 90% of the share capital required to delist. That said, if it does go through, that is if the Co. can manage to reach the magical figure required, I feel the mgt will leave no stone unturned to make it happen and should be happy to pay an exit price in the vicinity of 440 to 500.
I fear Shreyas Shipping will be no different, in that getting the required number could be a challenge given that there are number of big investors who feel short changed at the prospect of delisting, will not lodge their shares & are happy to play the waiting game. Personally, I feel one should exit atleast about 50% of one’s holdings at the current market price n lodge the balance for delisting, knowing fully well that there is a 50% chance of delisting not going through.
On second thoughts, it might not be such a bad idea to exit fully now!!
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