Shipping Corporation of India launched a thousand smiles on the bourses on Tuesday after the government said it would divest 51% stake in the state-run shipping major.

The scrip, in fact, propelled by the divestment initiative, spurted 5.84% to Rs 62.50 by 10:00 IST on BSE. The scrip notched up volumes of 22,275 shares on BSE by then. Between 28 March and 15 April 2003, Shipping Corporation of India had risen 17.6% to Rs 59.05 from Rs 50.20, indicating that divestment expectations were already running high in the counter.

On Tuesday, the Cabinet Committee on Disinvestment met with the aim of liberalising bidding guidelines covering SCI's divestment. The new guidelines were being set to garner interest from foreign shipping companies in the divestment process of SCI. In fact, the CCD has now decided that foreign companies can acquire the total 51% stake being put on the block in SCI compared to the earlier 26% cap on them.

The government holds 80% stake in SCI, of which it plans to offload 51%. 3% stake will be sold to employees of SCI.

The government has also decided to call fresh bids for SCI. Currently, there are only two bidders - Essar and Sterlite - in the race for SCI.

SCI is India's largest shipping company. It operates in two segments - the liner segment and the bulk segment. The liner segment includes break-bulk and container transport. The bulk segment covers tankers (both crude and product), dry bulk carriers, gas carriers and phosphoric acid carriers. The government only recently approved the sale of SCI's 20% stake in its liquefied natural gas venture Greenfield Holding Company to Japanese partner Mitsui.

For the quarter ended 31 December 2002, the company's net profit more than doubled to Rs 76.22 crore on total income of Rs 614.16 crore (Rs 6.14 crore).