Seaborne logistics company Seven Islands files IPO papers, to raise Rs 600 crore

Seven Islands Shipping, the third largest seaborne logistics company by deadweight tonnage in India, has filed its draft red herring prospectus (DRHP) with the capital market regulator Sebi for its maiden public offer.

The company plans to raise Rs 600 crore through its public issue which comprises a fresh issue of Rs 400 crore and an offer for sale (OFS) of Rs 200 crore.

The offer for sale comprises a Rs 100 crore worth of shares selling by FIH Mauritius Investments, Rs 85.642 crore shares by Thomas Wilfred Pinto, and Rs 14.358 crore worth of shares by Leena Metylda Pinto.

The company had earlier tried to hit the capital markets in 2017.

Seven Islands Shipping will utilise fresh issue proceeds to acquire a very large crude carrier vessel and one medium range vessel from the secondary market at an estimated expense of Rs 352.43 crore.

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The company started its operations with one vessel in FY03 and as of January 2021, it had 20 liquid cargo vessels with a total deadweight capacity of 11,05,682 MT which classified as small vessels, medium range or MR vessels and long range or LR vessels. Its capacity has grown from 6,009 MT of deadweight as of March 2003 to 66,889 MT of deadweight as of March 2010.

In 2020, the company held a significant market share in Indian time charters of crude oil imports, says CRISIL report. It is among the few Indian shipping companies that have delivered positive net profits in each of the past three fiscals and its return on average equity and return on average capital employed is among the highest in the seaborne logistics industry in India.

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During FY18-FY20, its revenue from contracts and EBITDA grew at a CAGR of 31.3 percent and 14 percent, respectively and its return on average equity and EBITDA margin is amongst the highest in the seaborne logistics industry.

Going forward, Seven Islands intends to focus on time charter arrangements, as it believes time charter arrangements provide more stability, predictability and certainty of revenues, compared to voyage charter arrangements. It also intends to grow fleet of vessels and ensure that it manages them internally.

JM Financial and IIFL Securities are appointed as the book running lead managers to the issue.