Analysts are of the view that Indian shipping firms need to widen their investor base in order to meet tonnage target and handle greater volumes of consignments coming their way in the near future With the Indian shipping sector poised to handle greater volumes of cargo in coming years, analysts believe that the shipping segment in the country should look out for ways to increase their channels of finance. According to a survey conducted by Shippingbiz360, 71% of the respondents feel that Indian shipping firms must try to expand their investor base, while 14% feel the other way round. Another 14% of the respondents are unsure about the same. Need for expansion It is to be noted that almost 40% of the Indian shipping fleet needs to be replaced. As per the regulations of the International Maritime Organisation (IMO), single hull tankers need to be swapped with double hull by December 2010. Although for In this context Joy Jacob, executive director of Century Shipyard Private Limited, a mid-sized ship part manufacturer in Cochin, Kerala says, “Expansion of investor base is not only essential to meet huge capital demands, but the same will ensure that shipping firms are not entirely dependent on government agencies for funds in order to meet their allied requirements.” Another major reason for which shipping firms need to widen their investor base is to meet their tonnage target. “In order to earn revenues it is important for shipping firms to increase their tonnage capacity. A diversification of the investor base will help shipping firms to increase their tonnage capacity, thereby ensuring a steady flow of revenue for them,” says S Nageswara Rao, managing director of Raghavendra Shipping Services, a mid-sized shipping firm in Experts believe that the Government of India (GoI) must also undertake initiatives to make the shipping sector more investor friendly. Arup Choudhury |
