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Shares of Container Corporation surged as much as 6 percent on Thursday after the company informed the exchanges that the Department of Investment and Public Asset Management (DIPAM) began roadshows with potential investors as part of the company's disinvestment process.

The roadshows, starting today, will conclude on Friday and will be carried out in virtual mode. Representatives from DIPAM, the Ministry of Railways, and CONCOR will participate in these roadshows.

Shares of the company gained as much as 6.5 percent to Rs 771.75, post the announcement. Courtesy Thursday's move, the stock is now up 8 percent over the last five trading sessions.

Regaining Market Share?

After Container Corporation reported strong EXIM (Export-Import) volumes during the September quarter, broking firm Nomura believes that the volumes may have reversed the trend of the company losing market share.

Container Corporation's EXIM handling volumes during the September quarter increased 18 percent from last year. The figure was higher than the EXIM volume growth of 5.8 percent for the Indian Railways. The growth was also higher than Nomura's estimates, which expected EXIM volumes to remain flat.

"This is a key positive, indicating a market share gain during the quarter, reversing the trend of market share loss for multiple quarters previously," Nomura wrote in its note.

Although Container Corporation's Domestic Volumes declined 9.3 percent compared to the June quarter, the segment's profitability has been weaker compared to EXIM.

Container Corporation already had a 66 percent market share in the EXIM segment in the June quarter and Nomura believes that a growth of 18 percent would mean disproportionate market share gains against the Indian Railways.

CNBC-TV18 quoting sources had reported that the government could invite an expression of interest for the strategic sale of Container Corporation of India in October to December quarter of this fiscal year.

The Union Cabinet on September 8 approved a 75 percent reduction in the railway land licensing fee (LLF), along with a much longer lease period, for specific end-uses.

Analysts suggested that this change in the LLF policy was a key step toward the privatisation of Concor.

The Cabinet had also lowered the land licence fee for the Railways from six percent to 1.5 percent for new entrants. The existing players will have the option to switch to a new policy through a bidding process.

Also, 300 new cargo terminals are envisaged under the new railway policy.

Nomura has maintained its buy rating on the stock with a price target of Rs 918, of which, Rs 143 are included as potential acquisition synergies.

(Edited by : Rukmani Krishna)

First Published:Oct 18, 2022 3:37 PM IST