Essar and Adani interest in DCI disinvestment

Vol 20, PW 24 (24 Aug 17) Midstream & Downstream

Essar and Adani have shown interest in taking a 51% stake in Vizag-based state owned Dredging Corporation of India (DCI) - likely to be auctioned by the government by the end of this year.

"This is an excellent opportunity for anybody in the dredging business!" says a source at Essar, which entered the dredging business in 2007. Adani which has a fleet of 19 dredgers, agrees with Essar.

"DCI is a good prospect and we will bid in the stake sale," confirms an Adani source. "The basic fundamentals are good." DCI's annual report for 2016-17 shows it has a net worth of Rs1520cr ($237m) and fixed assets of Rs1807cr ($282m).

This stake sale is part of the Narendra Modi government's move to raise Rs72,500cr ($11bn) in 2016-17 by divesting its stake from several state-owned companies. Industry source say others likely to show interest in the 51% stake include Mumbai-based Mercator, Chennai-based MARG, Hyderabad-based Dharti Dredging, Dutch company Van Oord, Belgium-based Dredging International, Netherlands-based Boskalis and the UAE's National Marine Dredging Company, presently working at the Swan FSRU site at Jafrabad.

"We have provided dredging services for almost all Indian ports and the Indian Navy," says a DCI company source. Set up in 1976, the total government stake in DCI today stands at 73.47%.

If and when the government sells 51% it will be left with a minority 22.47% stake.