Mumbai: India’s Great Eastern Shipping Co Ltd said on Friday its unit Greatship (India) Ltd (GIL) has dropped plans for an initial public offering (IPO) of shares citing bad market conditions.
In May last year, sources had told Reuters, the offshore services provider was planning to raise $80-$100 million by selling 22.05 million shares in an initial public offering.
Kotak Investment Banking, DSP Merrill Lynch and Edelweiss Capital were the bookrunners.
“However, in light of the prevailing market conditions, GIL, in consultation with its book-running lead managers, have decided not to proceed with the issue, and hence have withdrawn the DRHP,” (draft red herring prospectus), it said in a statement
Earlier in the day, Great Eastern Shipping reported a 24.5% rise in consolidated Oct-Dec net profit to Rs117 crore, despite a fall in revenue, in a quarter boosted by a gain of Rs55 crore from sale of ships.
Income from shipping operations fell 34% in the quarter from a year ago.
“This was mainly due to a decrease in revenue days by 13% and to some extent by lower rates as well,” it said.
Both tanker and dry bulk rates softened during the quarter.
“The quarter witnessed an overall softness in tanker earnings as compared to the previous year. Even though the winter season proved to be very severe, depressed demand for heating oil in US had a negative impact on the product tanker earnings.”
Dry bulk freight rates remained stable in the first half of the quarter but weakened in the second half due to a slowdown in Brazilian iron ore exports to Asia and coal exports being impacted due to floods in Australia.
GE Shipping said revenue visibility for the remaining part of 2010-11 was around Rs207 crore.
Its shares closed down 0.16% at Rs278.55 in a firm Mumbai stock market.