Sadhav Shipping Limited IPO

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Sadhav Shipping Limited (SSL), established in 1996 and headquartered in Mumbai, has evolved into a significant player in the maritime industry, specializing in owning and operating marine assets to service ports, coastal logistics, and other maritime-related services. With a fleet that includes 19 owned and 5 rented vessels, SSL has carved a niche in various sectors of maritime trade within India.

The company’s journey began as “Homa Offshore & Shipping Company Private Limited” before undergoing several name changes and finally becoming a public limited company as “Sadhav Shipping Limited.” The founder, Mr. Kamal Kant Biswanath Choudhury, brings a wealth of experience from the Directorate General of Shipping (India) and ONGC Ltd., underlining the leadership’s strong maritime and managerial background.

SSL’s operations are diversified across three main business verticals: Offshore Logistics, Port Services, and Oil Spill Response.

Offshore Logistics

SSL supports the Oil & Gas industry’s exploration and production activities, particularly for ONGC, by providing anchor handling, supply of drilling materials, search and rescue duties, and transportation to offshore locations. The fleet is equipped with Dynamic Positioning Systems and external firefighting systems, ensuring high safety standards.

Port Services

The company operates high-speed patrol craft, pilot boats, survey boats, work boats, and lighterage barges to offer comprehensive services to ports. These services include armed patrolling, hydrographic surveys, and transportation within harbour limits, all tailored to the specific requirements of major ports and private entities across India.

Oil Spill Response

SSL was pioneering in establishing India’s first port-based Tier 1 Oil Spill Response Facility Centre. The company now provides oil spill response services to major ports, equipped with containment booms and trained manpower, demonstrating its commitment to environmental protection and maritime safety.

Growth Opportunities

The company sees significant growth potential in line with India’s expanding economy and the corresponding increase in import and export activities. With investments flowing into the offshore oil & gas and port sectors, SSL aims to expand its services to more ports and introduce new offerings, including green technology-driven harbor crafts. Additionally, the anticipated increase in vessel requirements from ONGC Ltd. and the evolving market for oil spill response services in India present further avenues for expansion.

In summary, Sadhav Shipping Limited stands out for its comprehensive range of maritime services, strategic business model, and forward-looking growth strategies. Its commitment to quality, safety, and environmental protection positions it for continued success in the dynamic maritime industry.

Objects of the Sadhav Shipping Limited IPO:

The Objects of the Net Issue is to raise funds for: i. Repayment / Prepayment, in part or full of certain outstanding borrowings availed by the company, ii. Part funding of Capital Expenditure to Purchase/ Acquire additional Boats/ vessels, iii. Additional Working Capital Requirement, and iv. General Corporate Purpose.
DRHP of Sadhav Shipping Limited IPO
RHP of Sadhav Shipping Limited IPO

Sadhav Shipping Limited IPO Details:

Open Date: Feb 23 2024
Close Date: Feb 27 2024
Total Shares: 4,018,800
Face Value: ₹ 10 Per Equity Share
Issue Size: 38.18 Cr.
Lot Size: 1200 Shares
Issue Price: ₹ 95 Per Equity Share
Listing At: NSE Emerge
Listing Date: Mar 01 2024

Promoters And Management:

Mr.Kamal Kant Biswanath Choudhury, 69 years old having 48 years of experience including Master on Board Ships in Shipping Corporation of India, Nautical Surveyor in Directorate General of Shipping, Senior Deputy Director in ONGC Ltd. He is Managing Director and oversees all aspects of the Business including Technical, Financial, Business Development, HR, PR & CSR. Mrs. Sadhana K. Choudhury, 63 years old is Promoter Director of the company. Since inception she has been involved with the company and manages Administration and Public Relations departments.  She also handles CSR activities of the company. Mr. Vedant K Choudhury, 38 years old is the Director & CEO of the company having about 15 years of experience in Marine industry. He is currently looking after operations and business development at Sadhav Shipping Ltd. Under his leadership Sadhav Shipping Ltd. has successfully expanded its business by adding new clients and developed new business verticals like Oil Spill Response and Offshore Logistics. Vedant is an alumnus of Tolani Maritime Institute (BITS Pilani), SJ Mehta School of Management (IIT Bombay) and Copenhagen Business School, Denmark. Prior to joining Sadhav Shipping Ltd. in 2011, he was sailing on Foreign Going ships with Wallem Shipmanagement Ltd. Hong Kong and Germany.

Financials of Sadhav Shipping Limited IPO:

Particulars ( In Lakhs )
2021
2022
2023
6M-FY24
Revenue from Operations 6,057 6,955 7,781 3,369
Other Income 67 23 110 17
Total Revenue 6,124 6,978 7,891 3,386
Direct Operating Cost 3,087 3,818 3,641 1,274
Employees Benefit Expenses 1,154 1,368 1,689 736
Other Expenses 579 548 781 399
EBITDA 1,303 1,245 1,780 977
Depreciation & Amortisation 629 593 437 215
Finance cost 216 229 354 218
EBIT 674 652 1,344 762
OPM (%) 21.27% 17.84% 22.56% 28.84%
PBT 458 423 989 544
Tax 127 122 214 137
PAT 331 301 775 407
NPM (%) 5.40% 4.31% 9.83% 12.02%
No.of Shares 143.52 143.52 143.52 143.52
EPS 2.30 2.09 5.40 2.83

Comparison With Peers:

Name of the Company Revenue (In Crore) PAT (In Crore) EPS ( in Rs) P/E CMP Mcap (In Crore)
Sadhav Shipping Ltd. 78 8 5.40 17.6 95 136
Seamec Limited 437 34 12.98 46.5 1,146 2,914
Knowledge Marine & Engineering Limited 202 47 43.56 36.0 1,583 1,710
Garware Marine Industries Limited 1 0.12 0.21 N/A 12.6 7
* All the data is as per FY23.

Recommendation on Sadhav Shipping Limited IPO:

Review and Recommendation of Sadhav Shipping Limited by IZ team is 6/10 A) UnderStanding the Business of Sadhav Shipping 1. The company provides anchor handling, supply of drill materials, search and rescue duties, and transportation of offshore locations. 2. They offer high-speed patrol/shaft, pilot boats, survey boats, work boats, and barge services to ports. 3. They have established an oil spill response facility center. 4. The fleet consists of 24 vessels, including 19 owned vessels and 5 on-hire vessels. 5. Sadhay Shipping Limited was started in the year 1996. 6. The company was formed by Kamal Kant Biswanath Choudhary, an alumnus of T.S. Dufferin and Master Mariner, and also an alumnus of NITIMS and a gold medalist Fellow of Narottam Morarjee Institute of Shipping. 7. Their clients include ONGC, Mumbai Port, Paradip Port, Bhabha Atomic Research Centre, SEI, New Mangalore Port Authority, JNPA, BPCL, JSW Port. 8. They have a sailing team of 200+ officers and crew coupled with effective and experienced shore management. B) Business Verticals of Sadhav Shipping 1. Offshore Logistics (42%) = Ships are given on long-term charter in international competitive bidding process. 2. Oil Spill Response (10%) = They are one of the first company in India to start services of providing Tier-1 Oil Spill* Response facility for the Ports. 3. Port Services (25%) =  Provide on long-term charter basis to the ports. C) Financials Details About the Company 1. The total debt on books as on 30.09.2023 is ~66 Crores. And, net-worth of 45 Cr. So, D/E is >1 . 2. This business is having good 22% EBITDA Margins and 9% NPM in Fy23. 3. The top line has steady growth from Fy21 (60 Cr)  to Fy23 (77 Cr). However, Fy24 was flattish. 4. In the last 3 years they have generated a cash of ~42 Cr from Operations. Total Capex done was 61 Cr. SO, mostly capex done from Internal Accural. 5. ROE for Fy23 stands at 19.37%. 6. This year expected PAT is around 8 Cr and with Post IPO Outstanding Shares of 1.4352 Cr Shares, the EPS would be ~5.57. With Issue Price of 95, the P/E is 17x. Looks a decently priced IPO. 7. Mcap = 136 cr. 8. They are raising funds for Repayment of Loans, Capex and WC requirement. D) Risk in the Business 1 In the past lot of Interest and Penalties paid by the company for not filling GST Returns, ESIC/EPF Returns, TDS Return in time. This is serious thing for the business not to file statutory filling in time. 2. A substantial portion of our revenue comes from winning of tenders of Government Company or ports. 3. The company has high debt of 66 Cr on the books.

Lead Manager of Sadhav Shipping Limited IPO:

  1. ISK Advisors Private Limited

Registrar of Sadhav Shipping Limited IPO:

  1. Maashitla Securities Pvt. Limited

Company Address:

Sadhav Shipping Limited 521 5th Floor, Loha Bhavan, P.Dʹmello Road, Masjid (East), Mumbai - 400009 Phone: +91 ‐22‐40003355 Email: cs@sadhav.com Website: http://www.sadhavshipping.com/

Discussion on Sadhav Shipping Limited IPO:

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