Seven Islands IPO - Strengths, Purpose, Financial Performance and IPO details
Updated on July 1, 2021
Written by Manish Kothari
CEO Zfunds
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Seven Islands IPO
Seven Islands Shipping Limited was the 3rd largest seaborne company in India in terms of deadweight tonnage as of December 2020. As per CRISIL report, the company held a significant market share in the Indian charters of crude oil imports. The company is among the few Indian shipping companies which have delivered net profits (positive) in each of the past 3 fiscal years and their Return on Average Equity (ROE) and Return on Average Capital Employed (ROCE) are amongst the highest in the seaborne industry in India.
The company is present in the trade of liquid products like oils, lube oil, white oils, and liquid chemicals which are transported in vessels classified as Small vessels, MR(Medium Range) vessels, and LR (Long Range) vessels. It is also engaged in the logistics business of crude oil wherein it is transported in vessels such as Suezmaxand Very Large Crude Carriers or VLCCs, Aframax.
The Seven Islands has been currently rated as “CRISIL A/Stable” by CRISIL Ratings –a Standard & Poor’s division. The company’s EBITDA grew at a CAGR of 14.0% from ₹ 209.22 crores in the Fiscal Year 2018 to ₹ 272.12 crores in Fiscal Year 2020 and was ₹445.70 crores in the 9-month ended period on 31st December 2020. Their EBITDA margin was 50.6%, 35.8%, 38.1%, and 60.8% in Fiscal Year 2018, 2019, and 2020 and in the 9-months ended December 31, 2020.
The promoter of the company is Thomas Wilfred Pinto, Leena Metylda Pinto, and FIH Mauritius Investments Ltd.
Strengths of the Company
- Ability to obtain vessels at an optimal price and deploy vessels
- Strong relationships with major Indian gas and oil buyers
- Has a cost-competitive vessel management model
- Diverse & sizeable India flagged and owned operating fleet
- Financial performance has been consistent
- The company has the ability to retain the benefit of tax regime
- It has an experienced senior management team
Purpose of the IPO
The net proceeds from the IPO could be utilized for the following purposes:
- For acquisition of vessels (VLSS & MR vessel in the secondary market)
- For general corporate purposes
Financial Performance of the Company
| For the 9-month period ended 31st December 2020 | FY 2020 | FY 2019 | FY 2018 | |
| Total Revenue | 742.56 | 727.96 | 470.32 | 415.16 |
| Total Expenses | 619.87 | 643.20 | 429.32 | 326.33 |
| Profit After Tax | 119.46 | 80.29 | 38.81 | 88 |
| Total Assets | 1,803.29 | 1,655.26 | 1,226 | 935.65 |
*All the values are in crores and as per DRHP.
Valuation of the Company
| For the 6-month period ended 31st December 2020 | FY 2020 | FY 2019 | FY 2018 | |
| Basic Earnings per Share (EPS) | 20.88 | 14.03 | 8.13 | 18.50 |
| Diluted Earnings per Share (EPS) | 20.88 | 14.03 | 8.13 | 18.50 |
| Return on Net Worth (%) | 13.9% | 10.6% | 6.4% | 19.9% |
| Net Assets Value per Equity share | 160.74 | 139.96 | 150.87 | 101.86 |
*As per DRHP.
Seven Islands IPO DRHP
IPO details
| Face Value | ₹10 per equity share |
| Market Lot | Shares |
| Minimum Order Quantity | Shares |
| Price Band | ₹- ₹ per equity share |
| Issue type | Book Built Issue IPO |
| Issue Size | ₹600 Crores |
| Fresh Issue | ₹400 Crores |
| Offer for Sale | ₹200 Crores |
| Listing | NSE, BSE |
Important IPO dates
| Open Date | June 2021 |
| Close Date | June 2021 |
| Basis of Allotment Date | June 2021 |
| Initiation of Refunds | June 2021 |
| The credit of shares to Demat Account | June 2021 |
| Listing Date | June 2021 |
Allocation Quota
| Category | Portion |
| Qualified Institutional Buyers (QIBs) | Not more than 50% |
| Non- Institutional Buyers (NIIs) | Not less than 15% |
| Retail Investors | Not less than 35% |
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