Adani, I Squared Capital, DP World among participants at Concor roadshow

Sources indicate that Dipam is set to come out with an EoI by November first week

The pre-expression of interest (EoI) road show for the divestment of Container Corporation of India (Concor) has seen as many as five companies showing interest–-I Squared Capital, Sojitz Corporation, Adani Group, D P World and PSA Singapore. Sources indicate that Dipam is all set to come out with an EoI by the first week of November.

The road show was organised to bring clarity to possible investors about the land licensing fee, which was a major roadblock for Concor's divestment process in 2019. “Officials from Dipam, the Ministry of Railways and Concor were present at the meeting to address investor questions. Based on the feedback, Dipam is set to come out with an EoI by November first week,” a source said.

Concor's divestment process, which was cleared in November 2019, provides for a stake sale of about 30.8 per cent to private players, out of the total government holding of 54.8 per cent.  Based on Concor's current market cap of Rs 45,755 crore, 30.8 per cent stake in the company is valued at around Rs 14,093 crore. Hence, Concor is considered to be crucial to meet the divestment target of Rs 65,000 crore set for the current financial year.

On September 7, the Cabinet Committee on Economic Affairs (CCEA) had approved a proposal to lower LLF rates for new players to 1.5 per cent of the value of land, from six per cent. The annual escalation in fee was lowered to six per cent, from seven per cent earlier. The decision was made to attract private investment in Railway land.

A circular issued on October 4 clarified that all entities using railway land for cargo activities will continue to be governed by the Railways’ extant policies, i.e annual lease/licence charge at six per cent of the ‘market value of land’, with an annual escalation of seven per cent for the remaining lease period or 35 years or period mutually decided, whichever is earlier.

Concor had posted a net profit of Rs 1,062 crore in 2021-22, more than twice the 2020-21 number of Rs 503 crore. Its total income rose by 18 per cent to Rs 7,858 crore in 2021-22, from Rs 6,670 crore a year ago.