Apart from port terminals, Sical also has a category 1 license from the Indian Railways that allows it to run container trains in India.
Sical Logistics runs port terminals and container freight stations.
CDEL had hired ICICI Securities as an adviser to raise Rs 1,000-1,500 crore to reduce debt in the company while IDFC Securities was mandated to sell the majority of the assets.
Sical Logistics runs would be a good buy for Adani Ports And Special Economic Zone Ltd (APSEZ) which is India's largest private port. JSW Infrastructure can also look at the company to expand into areas where Sical operates.
DP World, owned by the Dubai government has also shown interest in the company as per sources. The bidders have reportedly entered a non-disclosure agreement.
But Sical’s two major port terminals could be a matter of concern for the investors. These key terminals are operating at government-owned ports and have regulated rates. As a result, the company is mandated to pay an unviable revenue share to the government. This curbs the terminal’s ability to earn decent returns on capital or even service the debts.
For example, Sical Iron Ore Terminals shares around 54.5 percent of its gross revenues from its coal handling facility (iron ore terminal before 2016) in Karnataka to the Kamarajar port authorities. The entity had raised a loan of Rs 600 crore for this terminal, the report pointed out.
Another port is PSA-Sical Terminals Ltd at VOC Port in Tamil Nadu which has been one of the most litigated terminals is burdened by tariffs since 2002.Apart from port terminals, Sical also has a category 1 license from the Indian Railways that allows it to run container trains in India. The entity also holds interest in warehousing, mining, shipping, road transport among others.Get access to India's fastest growing financial subscriptions service Moneycontrol Pro for as little as Rs 599 for first year. Use the code "GETPRO". Moneycontrol Pro offers you all the information you need for wealth creation including actionable investment ideas, independent research and insights & analysis For more information, check out the Moneycontrol website or mobile app.