GE Shipping to relist on Monday

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GE Shipping to relist on Monday

GE Shipping will relist on Monday, so what will the likely valuations be?

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Excerpts from Markets Midday on CNBC-TV18 Watch the full show » ALSO READ See latest News about GE Shipping See previous management interviews See what other Experts & Brokerages are saying about GE Shipping GE Shipping BSE | NSE 25/05/12 Are Mutual Funds betting on GE Shipping? Other Stocks in this news Lanco Industries |

According to CNBC-TV18, the shareholders would get  4 shares in the shipping company and one share in the offshore company. The total equity base of the shipping company would be around 15.2 crores shares and the off shore equity base would be 3.8 crore shares.

Post the de-merger, GE Shipping (GESCO) would be split into two entities: GE Shipping (GES) and Great Offshore (GOL) - the offshore division.  

GE Shipping as the stand alone entity would end up with a PAT of Rs 680 crores in FY07 itself. It would have a new equity base of Rs 15 crores and the EPS on new equity base would be around Rs 44 crores.

More importantly, most shipping companies trade at a discount of around 30% to net asset value, so it could be Rs 280. It could also be anywhere between Rs 225 to Rs 250. Importantly at this point would be listing of offshore company, which is where most analyst have expected the value unlocking would be.

Lanco  is the new entry. For Lanco the issue will be fixed at Rs 240, which is at the upper end of the price band. The company is basically into power construction and property. Based on the breakeven analysis Lanco could list anywhere between Rs 275 to Rs 280 on the first day itself.