Shipping stocks SCI, Shreyas Shipping and six others gain up to 20% - here’s why

Today, shipping stocks saw a notable surge with prices rising by up to 20% on potential budget announcements. The Maritime Development Fund may receive 15,000-20,000 crore allocation, said a report, boosting companies like SCI and Cochin Shipyard.

A Ksheerasagar
First Published11 Jul 2024, 02:36 PM IST
Shipping stocks today: Shipping stocks, SCI, Shreyas Shipping and three others gain up to 20%
Shipping stocks today: Shipping stocks, SCI, Shreyas Shipping and three others gain up to 20% (@MazagonDockLtd/Twitter)

Shipping stocks today: Shipping companies saw a notable surge in demand for their shares during today's intraday trading session, with prices rising by up to 20%. This rally was driven by media reports suggesting positive announcements for the sector may be made in the upcoming Union Budget on July 23.

The Maritime Development Fund is likely to receive an allocation between 15,000 crore and 20,000 crore, and the Harit Nauka scheme may also be announced, CNBC Awaaz reported, citing sources.

Also Read | Make in India: Defence production sees unprecedented growth in India in 2023-24

As a result of this, shares of the Shipping Corporation of India hit the 20% upper circuit limit, reaching 330 apiece. Other stocks, including Shreyas Shipping, Hariyana Shipping, Essar Shipping, and GE Shipping, are trading with gains of up to 15%.

Additionally, shipbuilding stocks like Mazagon Dock Shipbuilders, Cochin Shipyards, and Garden Reach Shipbuilding are also seeing gains of up to 5%. These companies could benefit from the Maritime Development Fund, which offers long-term loans at a lower cost.

Under the Harit Nauka scheme, incentives will be provided for ships powered by hydrogen. This is favourable for Cochin Shipyard, which built the hydrogen-powered ship for the pilot project.

Also Read | Multiple order wins lead to Garden Reach Shipbuilders gaining 123% in CY24

Maritime Development Fund is similar to established sectoral financial institutions like the Power Finance Corporation, REC, and IRFC.

If the government allocates funds to the sector, it could lead to significant development as the country's shipping sector currently lacks sufficient access to financial resources such as bank credit and foreign investment, despite its pivotal role in supporting the country's projected trade and economic growth.

According to analysts, the fund is expected to address the substantial funding requirements of the maritime sector, enabling the implementation of specific initiatives such as shipbuilding, decarbonisation, green energy adoption, technology innovation, and manpower training and development.

Also Read | Budget 2024: How to prepare your portfolio for the upcoming announcements?

Meanwhile, shipbuilding stocks have delivered exceptional returns in recent years. Mazagon Dock leads the pack with a remarkable 2000% return over the past two years, while Cochin Shipyard and Garden Reach Shipbuilders & Engineers have posted impressive gains of 1706% and 978%, respectively, during the same period.

 

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.

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$5 M

394,000

$112 B

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₹133.50 Cr

₹12,300 Cr

$136 M

First Published:11 Jul 2024, 02:36 PM IST
HomeMarketsStock MarketsShipping stocks SCI, Shreyas Shipping and six others gain up to 20% - here’s why

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