Seven Islands Shipping, whose clients include Indian Oil, BPCL and HPCL, is likely to file draft IPO papers with Sebi next week
Mumbai: Seven Islands Shipping Ltd plans to raise as much as Rs650 crore through an initial public offering (IPO), according to two people aware of the development.
Seven Islands Shipping, which started operations in 2002, has acquired more than 15 vessels and has operations along the Indian coast, Arabian Gulf and South-East Asia. It operates in two major sub-segments: crude oil trade and liquid products trade.
The company’s clients include Indian Oil Corp. Ltd, Hindustan Petroleum Corp. Ltd and Bharat Petroleum Corp. Ltd, among others.
The company is likely to file its draft share sale documents with the markets regulator Securities and Exchange Board of India (Sebi) in the coming week, said one of the two people cited above, requesting anonymity, as he is not authorized to speak to reporters.
“The company has been working on the draft prospectus for a while and they plan to file it with the regulator soon, eyeing a launch sometime in the first half of next calendar year. They are likely to use the funds for purchasing new ships for business expansion and for reducing debt. Edelweiss investment bank is advising the company on the IPO," he said.
According to the second person cited above, the company reported a revenue of around Rs300 crore in financial year 2015-16. He, too, requested anonymity.
Emails sent to Seven Islands Shipping were not answered.
So far this year, 24 companies have raised around Rs30,800 crore through IPOs. In 2015 and 2016, 47 companies had tapped the IPO route to raise around Rs40,107 crore, data from primary market tracker Prime Database shows.
The IPO market has seen logistics companies across the spectrum raise funds through initial share sales.
In 2014, logistics firm Navkar Corp. Ltd raised Rs600 crore through an IPO.
Navkar operates three container freight stations (CFS) close to the Jawarharlal Nehru Port, the country’s largest container port, near Mumbai.
The company raised funds to increase the capacity of its CFS, development of the non-notified areas of its CFS and the establishment of a logistics park at Valsad, Gujarat.
Last month, Mahindra Logistics Ltd, the logistics arm of Mahindra and Mahindra Ltd (M&M), filed the draft red herring prospectus for its proposed IPO.
The initial share sale, a pure secondary sale of shares, will see Mahindra Logistics shareholders sell a total of 19.33 million shares. M&M plans to sell 9.66 million shares, while other shareholders Normandy Holdings Ltd and Kedaara Capital Alternative Investment Fund—Kedaara Capital AIF I—are selling 9.27 million and 0.39 million shares, respectively.
Mahindra Logistics provides services such as warehousing, transport, in-factory logistics, people logistics and freight forwarding for clients across industries such as auto and auto component manufacturing, consumer, pharmaceuticals and e-commerce.
Warburg Pincus-backed Continental Warehousing (Nhava Seva) Ltd is another logistics firm which has filed for an initial share sale. Seaways Shipping and Logistics Ltd, which had filed share sale documents with Sebi last year, plans to relook at an IPO next year.