Great Eastern Shipping Company Share price and Fundamental Analysis

Company History

Promoted by Mulji (Sheth) brothers and Bhiwandiwalla family; Great Eastern Shipping Company Limited (GE Shipping) is a major player in the Indian Shipping industry. The Company is India's largest private sector shipping service provider enjoying a formidable presence in the international maritime industry. The shipping business operates under two main businesses: Dry Bulk Carriers and Tankers.

Great Eastern Shipping Company Limited was incorporated in 3rd August of the year 1948. It was soon after World War II, Great Eastern, barely two years old, was the first Indian shipping company to order two coastal cargo ships from Mitsubishi Shipbuilding Company, Kobe, Japan. In 1956, the company acquired its first oil tanker, it was also India's first, as a result it opened up new avenues for business. During the same year GE Shipping entered into an affreightment contract to transport 60,000 tonnes of iron ore from India to Japan. In 1957, the Company built its then largest dry bulk cargo vessel, a 13,000-dwt ship, named Jag Laxmi. Great Eastern started its regular liner services to carry general cargo from the Pacific coast of the US and Canada to India during the year 1962 and also in the identical year the company bought offshore supply vessels. In 1972, Great Eastern became the first shipping company to build an obo (ore-bulk-oil) carrier. The Company ordered 3 such vessels from Sweden. During the year 1975, Great Eastern started its own training academy. It was the first private shipping company to do so. In the year 1987, GE Shipping made a joint venture company for owning oil drilling rig and an oil-drilling barge. The Company acquired four ships in the year 1988 and renamed then as Jag Vijay, Jag Rani, Jag Rahat and Jag Kala. After a year, in 1989, GE Shipping acquired three more bulk carriers and renamed them as M.V. Jag Ratna, M.V. Jag Vikas and M.V. Jag Ravi. Another bulk carrier was renamed as M.V. Jag Rashmi.

A Memorandum of Agreement (MoU) was signed to purchase five number of Offshore Supply Vessels (OSV) with a view to cater both ONGC and Oil India Ltd. The Company acquired 5 more ships in the year 1990 of which one was a bulk carrier and the other 4 were offshore supply vessels. In the period 1991, the real estate business was in thunder level; hence GE Shipping had entered the property business in the same period. By way of the merger of GAL Offshore Services Ltd in the year 1991, the offshore division of the company commissioned 3 distinct activities, such as Operation of tugs comprising offshore supply vessels, harbor tugs and anchor handling tugs, Oil drilling and Offshore constructions. During the year 1992, the company was the first Indian Company to acquire a tanker and was also the first to engage in overseas tramp trade on a large scale. In 1992, A H Bhiwandiwalla & Company along with its two subsidiaries Dhirvijay Investment Company and MDSV Trading & Investment Company were merged with Great Eastern. The Company entered into contract for the acquisition of 2 Aframax tankers from Samsung Heavy Industries Company Ltd, Korea in the year 1997. GE Shipping made a joint venture with Singapore Technologies Construction Pte Ltd to build executive apartment hotels, convention service centres and multiplex plazas. During the year 1998, the company joined hands with Shipping Corporation of India and Varun Shipping and Great Eastern Company (Gesco) to form a pool' to transport liquefied petroleum gas (LPG) imported on free-on-board (FoB) basis.

GE Shipping entered into a joint venture agreement amongst Quatar General Petroleum Corporation (QGPC) and U B Air Pvt Ltd and united Helicharters Pvt Ltd in the year 2002. In the year 2003, the company placed a huge order for 45,500 metric tons new building product tanker with Hanjin Heavy Industries and Construction Co. Ltd, South Korea and also in the same year GE Shipping entered into new building contract for a 159,000 DWT Suexma crude Carrier with Hyundai Heavy Industries Co Ltd. It also signed a contract for new building Platform Supply Vessel (PSV). The Company acquired five single hull Aframax tankers between July and December of the year 2003. During the financial year 2003-04,the company ventured into the Very Large Crude Carrier (VLCC) sector for the first time. During the year 2004, Grate Eastern signed a contract to acquire a 1983 built geared Handymax Dry Bulk Carrier 37092 dwt vessel built in Japan, simultaneously sold the 1998 built, 2137 dwt mini bulk carrier 'GE 4. GE Shipping won the crude supply order from MRPL in the year 2005 and also acquired 26-pc stake in USL.

During September 2005 the company has decided to demerge its offshore business consisting of drilling services, marine logistics, marine construction and port/terminal services into a separate company, Great Offshore Ltd with effect from 1st April 2005. Greatship (India) Limited (Subsidiary of the company) had incorporated two wholly owned subsidiaries viz. Greatship Holdings B.V. in November 22nd of the year 2006 and Greatship Global Energy Services Pte Ltd in October 23rd of the year 2006. The Company acquired two 2000 built double hull Suezmax tankers, Jag Lakshita' and Jag Lateef' in September 2007. In November of the year 2007, Greatship Global Offshore Services Pte Ltd., the wholly owned subsidiary of Greatship (India) Limited (GIL) (Subsidiary of the company), had upgraded the two vessels ordered on Mazagon Dock Limited to Multi Support Vessels (MSVs).

The Company contracted to sell two of its double hull Medium Range (MR) product tankers Jag Panna' (37,145 dwt) & Jag Payal' (37,159 dwt) during February of the year 2008 and also contracted to sell its single hull General Purpose (GP) product tanker 'Jag Prayog'. The 1982 built, 29,990-dwt vessels in June of the same year 2008. Greatship (India) Limited (GIL), a wholly owned subsidiary of The Great Eastern Shipping Company Ltd placed an order for two state-of-the-art deep water 150 TBP Anchor Handling, Towage & Supply Vessels on Drydocks World Singapore in July of the year 2008. GE Shipping signed a contract with Hyundai Heavy Industries Ltd, South Korea for the construction of two Suezmax crude carriers of approx 158,000 dwt each during the month of July in 2008.

Grate Eastern committed with innovative and lots of technical agreements, in addition, it has a committed capital expenditure of USD 740 Million (approx Rs.3182 cr) for 19 more assets. These include 2 PSV's, 8 Multipurpose Platform Supply & Support Vessels, 2 MSVs, 6 AHTSV's and a 350 ft Jack up Rig. These assets are likely to be delivered between FY09 and FY11.

During the year ended 31 March 2014, GE Shipping announced buyback of its equity shares from the open market through stock exchanges at a price not exceeding Rs. 279 per share for an aggregate amount not exceeding Rs. 279 crore. The buyback commenced on September 2, 2013 and was completed on February 28, 2014. The company bought back 15,45,019 equity shares of face value of Rs.10 each for an aggregate amount of Rs. 41.27 crore. The highest, lowest and average price at which the shares were bought back was Rs. 279.00, Rs. 252.08 and Rs. 266.51 per share respectively. The company was unable to achieve the maximum buyback of Rs. 279 crore as the stock price remained above the maximum price of Rs. 279 per share during a substantial part of the buyback period.

GE Shipping took delivery of MR Tanker Jag Prabha' in August 2013 and MR Tanker Jag Pranav' in September 2013. The company sold and delivered GP Tanker Jag Parwar' in April 2013, GP Tanker Jag Preeti' in June 2013, Handymax bulk carrier Jag Ravi' in June 2013 and Aframax Tanker Jag Leela' in July 2013.

During the year, the company placed orders for 2 Kamsarmax Bulk carriers at Tsuneishi Shipbuilding Co. Ltd. The company also placed orders for 3 Kamsarmax Bulk carriers at Jiangsu New Yangzi Shipbuilding Co. Ltd.

Greatship (India) Limited's (GIL) wholly owned subsidiary in Australia - Greatship Subsea Solutions Australia Pty. Limited was voluntarily de-registered with effect from June 30, 2013. GIL's two wholly owned subsidiaries in Singapore - Greatship Subsea Solutions Singapore Pte. Ltd. and Greatship Global Offshore Management Services Pte. Ltd. were amalgamated with their parent company - Greatship Global Offshore Services Pte. Ltd. w.e.f. December 31, 2013. GIL is a wholly owned subsidiary of GE Shipping.

GE Shipping took delivery of a 1994 built VLGC Jag Vishnu' in Q2 FY2015, a 2006 built Supramax bulk carrier Jag Roopa' in Q2 FY 2015 and a 2004 built MR tanker, Jag Pranam' in Q3 FY 2015. The company sold and delivered a 1996 built MR tanker Jag Padma' in Q1 FY 2015, a 1991 built GP tanker Jag Prachi' in Q2 FY 2015, a 1990 built VLGC Jag Vidhi' in Q4 FY 2015 and a 1996 built Capesize bulk carrier Jag Arjun' in Q4 FY 2015.

During the financial year ended 31 March 2015, GE Shipping's wholly owned subsidiary Greatship (India) Limited (GIL) took delivery of a 2015 built mid-size Platform Supply Vessel -'Greatship Prachi' and its subsidiary in Singapore took delivery of a 350-feet jack-up drilling rig -'Greatdrill Chaaru'.

GIL's wholly owned subsidiary Greatship Global Offshore Services Pte. Ltd., Singapore (GGOS) incorporated GGOS Labuan Ltd. (GGOLL), Malaysia (GGOLL) as a wholly owned subsidiary in Labuan, Malaysia on June 25, 2014. GGOLL has been incorporated with a primary aim to establish closer ties, and provide offshore services, to the Malaysian market. However, it did not carry any operations during the year under review.

During the year under review, GIL redeemed 1.45 crore Preference Shares with the dividend rate of 7.5% p.a. held in it by GE Shipping.

GE Shipping took delivery of a 2015 built Kamsarmax Bulk Carrier 'Jag Arnav' in Q1 FY 2016, a 2015 built Kamsarmax Bulk Carrier 'Jag Aakash' in Q2 FY 2016 and a 2005 built MR tanker, 'Jag Padma' in Q4 FY 2016. During the year, the company sold and delivered a 2015 built Kamsarmax Bulk Carrier 'Jag Aakash' in Q2 FY16.

During the financial year ended 31 March 2016, GE Shipping's wholly owned subsidiary Greatship (India) Limited (GIL) sold one 2009 built 80-T Anchor Handling Tug cum Supply Vessel (AHTSV), 'Greatship Akhila'. There was no addition to the fleet during the year under review.

GIL incorporated Greatship Oilfield Services Ltd. (GOSL), India as a wholly owned subsidiary in Mumbai on July 9, 2015. GOSL has been registered as a Micro, Small & Medium enterprise. However, it did not carry out any operations during the year.

During the financial year ended 31 March 2017, GE Shipping took delivery of 7 tankers, 1 Very Large Gas Carrier and 6 Dry bulk carriers aggregating 1.39 Mn dwt. The company also sold an Aframax tanker in the financial year.During the year under review, GE Shipping's wholly owned subsidiary Greatship (India) Limited (GIL) sold one 1999 built Platform Supply Vessel (PSV), 'Greatship Disha' and its subsidiary in Singapore sold one 2013 built ROV (Remotely Operated Vehicle) Support Vessel (ROVSV), 'Greatship Ragini'. There was no addition to the fleet during the year under review. During the year under review, GIL commenced group restructuring exercise whereby the company has acquired full ownership of its Singapore subsidiary, Greatship Global Energy Services Pte. Ltd. (GGES) and further has also decided to acquire the jack-up rigs owned by GGES. Subsequent to acquisition of all shares of GGES from Greatship Global Holdings Ltd., Mauritius (GGHL) by GIL, GGES has become the direct 100% wholly owned subsidiary of GIL w.e.f March 28, 2017. During the year, GGHL sold all the shares held by it in GGES, representing 89.3% of share capital of GGES, to GIL and recognized a gain on disposal of its holding in GGES. GGHL is the holding company of Greatship Global Offshore Services Pte. Ltd., Singapore (GGOS).

During the year, GGOS's wholly owned subsidiary, GGOS Labuan Ltd., Malaysia was struck off with effect from March 4, 2017.

The Great Eastern Shipping Co. London Ltd. was a wholly owned subsidiary of GE Shipping. It did not carry out any operations during the year. The company had filed an application with the Companies House, UK for voluntarily striking off its name from Register of Companies, UK. The company has been dissolved w.e.f August 30, 2016.

During the year under review, GE Shipping bought back and extinguished 100 Secured and 550 Unsecured Debentures of Rs 10,00,000 each, aggregating to Rs 65 crore.

During the financial year ended 31 March 2018, GE Shipping took delivery of 2 product tankers, 1 medium gas carrier and 1 dry bulk carrier aggregating 0.24 Mn dwt. The company also sold 1 Supramax dry bulk carrier during the year.

In FY 2017, GE Shipping's wholly owned subsidiary Greatship (India) Limited (GIL) had commenced the group restructuring exercise whereby GIL had acquired full ownership of its Singapore subsidiary Greatship Global Energy Services Pte. Ltd. (GGES) in March 2017. As a part of the restructuring exercise, in FY 2018, GIL has acquired four jack-up rigs along with its Plant, Machinery & Equipments/ Owner Furnished Eguipments (the Rigs) from GGES in June 2017. As part consideration for acquisition of the Rigs, GIL has taken over the outstanding bank borrowings of GGES and the balance outstanding consideration is to be settled by June 2018, in accordance with the Memorandum of Agreement (as amended).

Further, during the year under review, the Board of Directors of GIL and its wholly owned subsidiary in Mauritius, Greatship Global Holdings Ltd. (GGHL), have approved a cross border merger of GGHL with GIL. GIL and GGHL have commenced the process for the merger and made the necessary applications to the relevant authorities for their approval.

During the year, Great Eastern Chartering LLC (FZC) made a further investment of USD 0.25 million in the share capital of The Great Eastern Chartering (Singapore) Pte Ltd., its wholly owned subsidiary. Great Eastern Chartering LLC (FZC) is wholly owned subsidiary GE Shipping.

Considering the low number of GDRs outstanding, GE Shipping decided to terminate the GDR programme and subsequent delisting from Euro MTF Market of Luxembourg Stock Exchange in accordance with the terms of Deposit Agreement with The Bank of New York Mellon, Depository (BNY) and the regulations of Luxembourg Stock Exchange. Accordingly, the GDR programme was terminated and the GDRs were delisted from Euro MTF Market of Luxembourg Stock Exchange with effect from November 20, 2017. Upon such termination, BNY has given delivery of underlying shares upon surrender of GDRs or the net proceeds of sale of the underlying shares to the GDR holders.

During financial year 2019, the Company took delivery of 2 Very Large Gas Carriers and 1 Medium Gas Carrier aggregating 0.15 million dwt. The Company also sold 1 Kamsarmax and 1 Supramax dry bulk carrier, both delivered to buyers in the financial year, and 1 Very Large Gas Carrier (VLGC) for delivery in FY2019-20.

In March 2019, the Company's Singapore subsidiary, Greatship Global Energy Services Pte. Ltd. (GGES) reduced its share capital by about USD 163.96 million and returned the capital proceeds to GIL. GIL utilized part of these proceeds to pay the afore-mentioned balance consideration along with applicable interest to GGES towards the purchase of Rigs. With this, the group restructuring exercise has been completed.

During FY19, National Company Law Tribunal, Mumbai Bench sanctioned the Scheme of Amalgamation of Greatship Global Holdings Limited (GGHL) with GIL vide its order issued on July 24, 2018. GGHL was removed from the Register of Companies, Mauritius on August 28, 2018. All other necessary formalities with respect to the Scheme of Amalgamation were completed and the Scheme became operative from September 1,2018, with the Appointed Date under the Scheme being April 1, 2017. Consequent to merger, the subsidiary, Greatship Global Offshore Services Pte. Ltd. became the direct wholly owned subsidiary of GIL.During the year, the company's subsidiary Greatship Global Offshore Services Pte. Ltd., Singapore (GGOS) sold one 2009 built Anchor Handling Tug Cum Supply Vessel - 'Greatship Aditi' to GIL on February 15, 2019 and entered into a Memorandum of Agreement with GIL on February 12, 2019 for purchase of one 2010 built R-Class Supply Vessel, 'Greatship Ramya'. Subseguent to the end of the year, GGOS completed the purchase of'Greatship Ramya' from GIL on April 08, 2019.

As at 31st March 2020,Company's fleet stood at 46 ships aggregating to 3.70 million dwt, with an average age of 12.20 years. During the financial year 2019-20, Company delivered to buyers a Very Large Gas Carrier (VLGC) and sold to the buyers a Suezmax crude carrier.

As on March 31, 2021, Company's fleet stood at 45 vessels, comprising 32 tankers and 13 dry bulk carriers with an average age of 11.86 years aggregating 3.64 mn dwt.

During the financial year 2020-21, Company took delivery of a Very Large Gas Carrier - Jag Vishnu', an LR2 tanker - Jag Lara' and a Capesize Bulk Carrier - Jag Alaia'. It contracted to buy a Mid-sized Gas Carrier - Jag Vikram', which was delivered to the Company and a Supramax Bulk Carrier. It sold to the buyers a Very Large Gas Carrier Jag Vidhi', two Suezmax Crude Oil Carriers Jag Lateef' and Jag Laadki' and a Supramax Bulk Carrier Jag Roopa'. It contracted to sell a Mid-sized Gas Carrier 'Jag Vayu'.

As of 31 March 2022, the Company's fleet stood at 45 vessels, comprising 31 tankers and 14 dry bulk carriers with an average age of 12.55 years aggregating 3.57 mn dwt.

During FY 2022, Company took delivery of a Midsize Gas Carrier Jag Vikram' and a Supramax Bulk Carrier Jag Rajiv'. It delivered to the buyers a Midsize Gas Carrier Jag Vayu' and an Aframax Crude Oil Carrier Jag Lata'.

As of 31 March 2023, the Company's fleet stood at 43 vessels, comprising 29 tankers and 14 dry bulk carriers with an average age of 12.55 years aggregating 3.57 mn dwt. During the year 2023, the Company sold and delivered to the buyers a Midsize Gas Carrier Jag Vijaya' and an Aframax crude oil carrier Jag Lyall'.