Sheths Scale Up Ge Shipping Pie To Over 21%

The Sheths, promoters of Great Eastern Shipping Company, are consolidating their hold over the company, with Ravi Sheth increasing his personal stake to over five per cent.

The Sheths have now hiked their stake to over 21 per cent stake in the company against the 19.5 per cent they held at the end of the last round of buyback of shares.

The company has also announced a second round of buyback shortly at Rs 42 a share, following which the promoter holding is likely to go up further. The company has earmarked Rs 100 crore for the second buyback.

GE Shipping today said in a notice issued to the Bombay Stock Exchange that Ravi Sheth now holds 5.007 per cent stake in the company. It has also said the promoters' stake has gone up to 21.01 per cent.

In December last year, GE Shipping had announced a buyback when the Sheths held 14.5 per cent stake.

The company had, at that time too, capped the buyback price at Rs 42 per share and had earmarked Rs 150 crore for the buyback. The 25 per cent buyback was fully subscribed.

GE Shipping has announced the second round of buyback at a time when the shipping industry is booming. The company had posted a record net profit of Rs 177.40 crore in 2000-01. It had declared a dividend of 27.5 per cent.

A buyback of shares is a typical route by promoters to hike their stake in a company. Under this route, companies buy shares through open market operations and then extinguish them.

This automatically results in a hike in the promoters' stake, as the equity base of the company gets reduced.