Friday 14 May 2021

Huge betting on shipping business by Apeejay group

With the international seaborne dry mass trade which is expected to gain the momentum in next some years, group of Apeejay Surrendra is betting huge on their business of shipping. The Group firm Apeejay Shipping bought the ships carrying iron ore, grains and coal. It is even looking to raid in tanker, to dredge or OSV segment as the business propositions in such segments enhances. The company also operates in segment of dry bulk cargo. Even though earnings from the business of shipping to the total turnover of group is at the moment not more than about 10-15 % outstanding to the depressed conditions of market and the networth of approximately rs 880 crore, fleet augmentation and foray in new lines of the business is anticipated to enhance the earnings as well as networth.

The officials of Company said that business contribute about 40% to total turnover of group of rs 1,800 crore. However, the total networth of the group is at present more than rs 6,000 crore. Moreover, ICRA, the Credit rating agency recently reaffirmed about assigning of AA- rating to shipping term loans of Apeejay, bank limits which are based on fund and on non-fund. The reports of Icra states that ratings takes in account the track record of company in business of dry bulk shipping, their healthy and settled financial profile as well as comfortable position of liquidity which is supported by huge portfolio of the liquid investments that generates the substantial income which is non-operating and which adds stability to cyclical cash flows from the core business of shipping.

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Post-acquisition, this company has now 8 ships in their fleet with about 4.84 lakh of DWT capacity which is also known as deadweight-ton. The average age of company fleet is about 11.88. The achievement is financed by the mixture of equity and debt having ratio of 0.45:1.

Even though we are looking at the opportunities and chances in various other segments of business, it feels that presently the opportunity in huge trade is more. While we’re on the subject, the shipping business appears to be quite improving with regard to the rates of freight. The Index of Baltic Dry, a measure of price to ship coal, grains and iron ore, more than double to 1,581 during this year, which rebound from lowest average annual since 1993, as per the Baltic Exchange, which is the London-based publisher of  the freight prices.