Seven Islands Shipping transports crude oil in vessels that are classified as Suezmax, Aframax and VLCCs. The company operates 20 vessels in total, which include 13 MR vessels and 4 small vessels, while the rest are Suezmax vessels.
Seven Islands Shipping Limited is a seaborne logistics firm that was established in 2002 and has its main office in Mumbai. The business trades crude oil, lubricants made from petrochemicals, and other commodities. This company places a high priority on efficiency and maintaining a clean workplace, among other things. The capital market regulator SEBI has received preliminary papers from Seven Islands Shipping Limited for a Rs. 600 crore public offering. According to the draught red herring prospectus (DRHP), a
new issuance of Rs. 400 crore would be part of the first public offering. An offer for sale (OFS) by current shareholders and promoters will make up the remaining portion of the public offering.
It will raise Rs. 100 crore for FIH Mauritius Investment. While Leena Metylda Pinto and Thomas Wilfred Pinto would use the secondary issue to sell equity shares valued at up to Rs. 14.35 crores and Rs. 85.64 crores, respectively.
Seven Islands Shipping IPO Objectives
Seven Islands Shipping aims to fulfill the following objectives by utilizing the net proceeds from its initial public offering:
- Fulfillment of general corporate purchases
- Financing the purchase of MR vessels and VLCC vessels in the secondary market
Why Should You Invest in the Seven Islands Shipping IPO?
- Seven Islands Shipping has a proven track record when it comes to delivering strong financial services. The company’s highly experienced and efficient management team has played a vital role in that regard. They have formed longstanding relationships with some of the leading oil and gas customers. It is represented by the timely renewal of the short-term (12–24 month) contracts.
- Taking into account the fact that demand for vessels to transport and import crude oil has been rising steadily, it appears that this company has tremendous potential to grow. Furthermore, key metrics such as revenue and margins in relation to this company are expected to grow. Hence, investors might consider subscribing to Seven Islands Shipping’s initial public offering.
Seven Islands Shipping IPO Financials
| Financial Year (As of) | Profit After Tax (in Rs. Crore) | Total Assets (in Rs. Crore) | Total Expenses (in Rs. Crore) | Total Revenue (in Rs. Crore) |
|---|---|---|---|---|
| December 30th, 2020 | 1,194.67 | 18,032.99 | 6,198.77 | 7,425.64 |
| March 2020 | 802.96 | 16,552.68 | 6,198.77 | 7,279.61 |
| March 2019 | 388.16 | 12,260.06 | 4,293.23 | 4,703.22 |
| March 2018 | 880.01 | 9,356.51 | 3,263.31 | 4,151.63 |
Know before investing
Strengths
- Seven Islands Shipping has a proven track record when it comes to financial performance. The company purchases vessels at an optimal price. Moreover, the measures taken by it have been instrumental in reducing costs and maintaining operational efficiency.
- The company has a highly experienced management team; its promoters have more than three decades of experience. Furthermore, they’ve managed to develop favorable relationships with oil majors belonging to the public sector, which is evident considering the favorable short-term contracts that the company renews on a timely basis.
- This company has judicious risk management policies, which include acquiring a vessel only after assurance of deployment.
Risks
- If any unfavorable change materializes in relation to the tanker division or the Cabotage Law, in particular, the company’s risk profile could be severely impacted.
- The increasing competition in the industry could affect charter rates.
- This company requires a substantial amount of capital to run its operations owing to the high cost of ocean-going tankers. While the price of an MR tanker is more than Rs. 65 crore, a Suezmax vessel costs anywhere between Rs. 100 crore and Rs. 125 crore.
Seven Islands Shipping Peer Comparison
| Name of the Company | Face Value | EPS (in Rs.) | Return on Net Worth (RONW) |
|---|---|---|---|
| Seven Islands Shipping | Rs. 10 | Rs. 14.03 | 10.6% |
| Great Eastern Shipping Company | Rs. 10 | Rs. 13.9 | 3.0% |
| Shipping Corporation of India | Rs. 10 | Rs. 7.2 | 4.5% |
| Transport Corporation of India | Rs. 2 | Rs. 18.5 | 14% |
| VRL Logistics Limited | Rs. 10 | Rs. 10.0 | 14.6% |
Seven Islands Shipping IPO FAQs:
Q1. What is the Seven Islands IPO?
Ans. Seven Islands Shipping has filed a DRHP with capital market regulator SEBI to raise funds worth Rs. 600 crore via an initial public offering. This company’s public issue will comprise a fresh issue of Rs. 400 crore and an offer for sale (OFS) of Rs. 200 crore by existing shareholders and promoters.
Q2. When can investors start subscribing to the Seven Islands IPO?
Ans. The opening date of this forthcoming IPO is not yet known.
Q3. Who are the book-running lead managers in relation to the Seven Islands Shipping IPO?
Ans. The lead managers for this initial public offering are IIFL Securities Ltd. and JM Financial.
Q4. What is the price band of this forthcoming public issue?
Ans. Seven Islands has not disclosed the price band of its upcoming IPO as of yet.
Q5. How will investors receive the allotted shares?
Ans. After the completion of the allotment process, shares will be credited to the Demat accounts of investors.
Q6. Who is the registrar for the Seven Islands IPO?
Ans. The registrar for the public issue of Seven Islands is Link Intime India Private Limited.
Q7. Who are the promoters of Seven Islands?
Ans. The promoters of this company are Thomas Wilfred Pinto, Leena Metylda Pinto and FIH Mauritius Investments Ltd.
Q8. What are the different segments of investors that can apply for the Seven Islands IPO?
Ans. Seven Islands will be reserving portions of the public issue for qualified institutional buyers (QIBs), non-Institutional investors (NIIs) and retail individual investors (RIIs).
Q9. What type of IPO is the Seven Islands IPO?
Ans. The initial public offering of Seven Islands is a book build issue.
Q10. What is the listing date of the Seven Islands IPO?
Ans. The listing date of Seven Islands’ initial public offering has not been announced yet.
