CONCOR trades lower as stake sale plan runs into railways

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"Unless the internal processes get completed, we cannot look at issuing EOIs (expressions of intent) for CONCOR. I can't say when the EOIs for CONCOR will be issued. It is difficult to say if the transaction will get completed this fiscal," another senior government official had told Moneycontrol earlier.

The plan 

The government in September had come out with a new land- leasing policy after market participants raised concerns over the land licensing fees being paid by CONCOR. The cabinet decided that the new land lease charges will be levied at 1.5 percent of the market value of land per annum with annual escalation of 6 percent.

Also Read: Exclusive: Concor strategic sale at ‘status quo’ as railways raises concerns: Official

CONCOR runs 61 inland container depots, of which 26 are on land leased from the Indian Railways. These 26 terminals account for more than half of the annual revenue of the company. CONCOR is expected to pay land lease charges of Rs 450-490 crore for 2023-24 after it had estimated the payout at Rs 450 crore for 2022-23.

The cabinet in November 2019 had approved the strategic sale of a 30.8 percent stake, along with transfer of management control, in CONCOR out of the government equity of 54.80 percent. The government will retain a 24 percent stake but without any veto powers.

Stock performance

Container Corporation of India Ltd stock has lost 14.28 percent of its value over the past six months, underperforming the benchmark Nifty which has given a return of 0.75 percent over the same period.

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